E-commerce merchants long trapped by platform rules such as "lowest price online" and "automatic price matching" may soon see a substantive return of their pricing power.

New E-Commerce Regulations: Platforms Forcing Merchants to Offer "Lowest Price Online" Are Illegal

Recently, three ministries—the National Development and Reform Commission, the State Administration for Market Regulation, and the Cyberspace Administration of China—jointly issued the Rules on Price Conduct of Internet Platforms. The rules explicitly prohibit platforms from forcing merchants to cut prices, mandating "lowest price online," or imposing unreasonable restrictions such as traffic limits, product delisting, or deposit deductions.

Set to take effect in April 2026, the new regulations aim to institutionalize curbs on platforms abusing their market dominance to interfere with merchants’ independent pricing.

This move is seen as a systematic correction to the escalating "low-price involution" and "hidden pressure" exerted by platforms on e-commerce in recent years. Whether the rules can be effectively implemented, how platforms will adjust their strategies, and whether merchants’ operating environments will truly improve have become key industry concerns.

New Rules Clarify Merchants’ Independent Pricing Power; Platform "Hidden Pressure" Halted

The Rules on Price Conduct of Internet Platforms for the first time explicitly enshrines merchants’ right to "independent pricing in accordance with law" at the regulatory level, while drawing clear red lines for platform interference in pricing.

For example, Article 5 stipulates that platforms shall not indirectly deprive merchants of pricing autonomy through forced price cuts, mandatory "lowest price online" requirements, or compulsory activation of automatic price-matching systems.

Specifically, the rules ban platforms from coercing merchants into participating in price-cut promotions or cross-platform price comparison constraints via measures like traffic restrictions, search ranking demotion, product delisting, or deposit deductions.

However, the clauses also clarify exceptions for unified pricing under specific business models (e.g., platform-owned operations).

Some merchants note that this means certain platform-owned businesses are exempt: "Under the platform-owned model, the platform essentially controls product ownership and pricing power, leaving merchants with little room for intervention."

Beyond pricing power, Article 6 regulates platform charging practices, requiring adherence to principles of fairness, legality, and integrity, with advance disclosure of fee standards and reasonable transition periods for major adjustments.

This is widely seen as targeting controversial mechanisms such as "hidden deductions" and "refund-only" policies in recent years.

Against a backdrop of rising commissions and advertising fees, various deduction items have become a heavy operational burden for merchants. According to the 2024 E-Commerce Platform "Refund-Only" Survey Report, only 1.06% of merchants avoided "refund-only" incidents in a year, while over 80% reported such cases accounting for 10%-30% of their transactions.

This year has also seen multiple cases of fraud involving AI-synthesized fake videos and images to claim "refund-only" benefits, leaving merchants vulnerable.

The new rules further mandate price transparency, explicitly prohibiting big data-enabled price discrimination against regular customers, and strengthening restrictions on deceptive practices like price hikes followed by discounts and false promotions.

Overall, the rules address pricing, fees, and promotions across multiple dimensions, seeking to systematically correct the long-standing imbalance of power between platforms and merchants, and provide an institutional foundation for a fairer operating environment.

200,000 merchants have joined Paidai communities covering TikTok, Temu, Taobao ecosystem, Douyin, Pinduoduo, Xiaohongshu, etc. Follow Paidai Cross-Border for free community access↓

What Do Merchants Think of the New Rules?

The issuance of the Rules on Price Conduct of Internet Platforms has sparked multi-layered discussions among e-commerce practitioners. Optimists view it as a crucial step to curb "low-price involution" and reshape fair competition; skeptics remain cautious about enforcement effectiveness, fearing platforms will maintain old practices through more covert means.

Many merchants welcome the rules, arguing they legally invalidate forced price cuts and help break the vicious cycle of "no traffic without price reductions."

One merchant noted that only by achieving a win-win situation for platforms, merchants, and consumers—allowing healthy wealth flow across different links—can e-commerce sustain long-term, healthy development.

He further illustrated the harms of low-price involution with an analogy: "A, B, and C are offline retailers. A buys clothes from B, B buys appliances from C, and C buys shoes from A, creating an economic cycle. Later, they discover external e-commerce merchant D offering high-quality, low-price products, diverting all consumption to D and draining capital from the ABC system, forcing them into involution or transformation." In his view, the new rules aim to reverse this unsustainable model.

An e-commerce industry observer emphasized the need to accurately understand regulatory intent: "This document does not reject low prices. Anti-involution ≠ anti-low price."

He argued the rules target three distorted low-price practices: first, "bullying low prices" (platforms forcing merchants to offer discounts or match prices); second, "fraudulent low prices" (e.g., falsely advertised subsidies); third, "capital-driven low prices" (selling below cost to eliminate competitors).

Meanwhile, reasonable low prices driven by technological innovation and efficiency improvements should be encouraged rather than suppressed. The core is to incentivize merchants to win market share through product innovation, service upgrades, and business model optimization—benefiting consumers while allowing merchants to earn legitimate profits.

However, many merchants doubt the rules will bring substantive change. "There will be no real change; when policies are issued, platforms always find ways to cope," a sentiment widely shared among merchants.

Their core concern is that as de facto rule operators and traffic distributors, platforms hold the initiative to define "voluntary" and "activity rules."

"You [merchants] can set high prices, but if you have poor sales, you’ll get no traffic—so you have to cut prices anyway!" one merchant pointed out the practical dilemma: even if explicit mandatory clauses are removed, "soft levers" like traffic allocation and activity resource slots may still trap merchants in a cycle of "passive voluntary" price cuts.

Overall, the new rules mark an important regulatory intervention in platform economy pricing order, resonating widely with merchants.

Yet industry consensus holds that translating rules from text to practice faces multiple challenges: clearly defining "forced" vs. "voluntary" actions, regulating algorithmic "black boxes" in traffic allocation, and establishing effective merchant appeal and rights relief channels. Ultimately, enforcement success will depend on subsequent detailed guidelines, platform adjustments, and sustained, robust routine supervision.

Three Major Challenges for Merchants in Rule Implementation

Based on widespread merchant feedback, implementation faces at least three practical challenges related to rule definition, cost burdens, and dispute resolution mechanisms.

Challenge 1: Blurred Line Between "Active" and "Passive" Price Cuts; Traffic Levers Risk Becoming New "Soft Coercion"

The rules explicitly ban forced price cuts, but merchants often face the dilemma of "voluntary" participation in practice. Many merchants bluntly state: "Platforms never force price cuts—we voluntarily sign up for activities and cut prices on our own."

The crux is that when "no access to key activity resources or traffic without price cuts" becomes an unwritten platform rule, so-called "voluntary" actions are essentially "passive choices" driven by traffic allocation mechanisms.

Merchants lamented: "If you don’t cut prices, you get no activity slots or traffic—how can you break this?" This highlights a key implementation challenge: effectively regulating indirect pressure exerted by platforms through non-explicit means like traffic and algorithms.

Challenge 2: Proliferating Deductions Increase Operational Burdens; Smart Algorithms Expand Regulatory Blind Spots

Current e-commerce operations involve complex deduction items—from late delivery fines to "refund-only" deductions—imposing heavy cost pressures on merchants. Small and medium-sized merchants, in particular, have limited supply chain flexibility and struggle to fully meet platform timeliness requirements.

One seller complained: "To get traffic, everyone promises 24/48-hour delivery, right? Stockouts lead to fines or delisting. How can small sellers keep up with sudden surges in orders?" They called for greater platform flexibility in rule enforcement.

Some merchants also suggested replacing direct fines with a "point deduction system" to achieve regulatory goals without immediate cash flow shocks.

Deeper concerns focus on algorithmic systems like smart promotion: "When smart promotion brings you orders, how can you confirm the platform is being fair?" Merchants distrust algorithmic "black boxes" and potential unfair deductions, citing a lack of effective review and appeal channels.

Challenge 3: Imbalanced Consumer Dispute Resolution; Merchants Call for Independent Arbitration Systems

Under existing platform dispute resolution mechanisms, merchants widely feel disadvantaged. "A third-party customer service system should be established to handle platform disputes," one merchant proposed.

The current model, dominated by in-house platform customer service, is often perceived by merchants as biased toward consumers, with limited avenues for appeal and checks and balances. A relatively neutral, transparent third-party dispute mediation or arbitration mechanism is seen as critical to balancing platform, consumer, and merchant interests and ensuring impartial rule enforcement.

In summary, the new rules represent a crucial first step, but their effectiveness depends on sustained responses to these operational challenges and institutional refinement.

This requires regulators to issue clearer implementation guidelines and case definitions, platforms to proactively adjust traffic allocation, deduction models, and dispute resolution mechanisms, and translate "protecting merchant autonomy" from compliance clauses into business practice.

Only then can the industry shift from destructive "price involution" to healthy competition centered on products and services, achieving long-term ecological win-win outcomes.

E-commerce merchants long trapped by platform rules such as "lowest price online" and "automatic price matching" may soon see a substantive return of their pricing power.

New E-Commerce Regulations: Platforms Forcing Merchants to Offer "Lowest Price Online" Are Illegal

Recently, three ministries—the National Development and Reform Commission, the State Administration for Market Regulation, and the Cyberspace Administration of China—jointly issued the Rules on Price Conduct of Internet Platforms. The rules explicitly prohibit platforms from forcing merchants to cut prices, mandating "lowest price online," or imposing unreasonable restrictions such as traffic limits, product delisting, or deposit deductions.

Set to take effect in April 2026, the new regulations aim to institutionalize curbs on platforms abusing their market dominance to interfere with merchants’ independent pricing.

This move is seen as a systematic correction to the escalating "low-price involution" and "hidden pressure" exerted by platforms on e-commerce in recent years. Whether the rules can be effectively implemented, how platforms will adjust their strategies, and whether merchants’ operating environments will truly improve have become key industry concerns.

New Rules Clarify Merchants’ Independent Pricing Power; Platform "Hidden Pressure" Halted

The Rules on Price Conduct of Internet Platforms for the first time explicitly enshrines merchants’ right to "independent pricing in accordance with law" at the regulatory level, while drawing clear red lines for platform interference in pricing.

For example, Article 5 stipulates that platforms shall not indirectly deprive merchants of pricing autonomy through forced price cuts, mandatory "lowest price online" requirements, or compulsory activation of automatic price-matching systems.

Specifically, the rules ban platforms from coercing merchants into participating in price-cut promotions or cross-platform price comparison constraints via measures like traffic restrictions, search ranking demotion, product delisting, or deposit deductions.

However, the clauses also clarify exceptions for unified pricing under specific business models (e.g., platform-owned operations).

Some merchants note that this means certain platform-owned businesses are exempt: "Under the platform-owned model, the platform essentially controls product ownership and pricing power, leaving merchants with little room for intervention."

Beyond pricing power, Article 6 regulates platform charging practices, requiring adherence to principles of fairness, legality, and integrity, with advance disclosure of fee standards and reasonable transition periods for major adjustments.

This is widely seen as targeting controversial mechanisms such as "hidden deductions" and "refund-only" policies in recent years.

Against a backdrop of rising commissions and advertising fees, various deduction items have become a heavy operational burden for merchants. According to the 2024 E-Commerce Platform "Refund-Only" Survey Report, only 1.06% of merchants avoided "refund-only" incidents in a year, while over 80% reported such cases accounting for 10%-30% of their transactions.

This year has also seen multiple cases of fraud involving AI-synthesized fake videos and images to claim "refund-only" benefits, leaving merchants vulnerable.

The new rules further mandate price transparency, explicitly prohibiting big data-enabled price discrimination against regular customers, and strengthening restrictions on deceptive practices like price hikes followed by discounts and false promotions.

Overall, the rules address pricing, fees, and promotions across multiple dimensions, seeking to systematically correct the long-standing imbalance of power between platforms and merchants, and provide an institutional foundation for a fairer operating environment.

200,000 merchants have joined Paidai communities covering TikTok, Temu, Taobao ecosystem, Douyin, Pinduoduo, Xiaohongshu, etc. Follow Paidai Cross-Border for free community access↓

What Do Merchants Think of the New Rules?

The issuance of the Rules on Price Conduct of Internet Platforms has sparked multi-layered discussions among e-commerce practitioners. Optimists view it as a crucial step to curb "low-price involution" and reshape fair competition; skeptics remain cautious about enforcement effectiveness, fearing platforms will maintain old practices through more covert means.

Many merchants welcome the rules, arguing they legally invalidate forced price cuts and help break the vicious cycle of "no traffic without price reductions."

One merchant noted that only by achieving a win-win situation for platforms, merchants, and consumers—allowing healthy wealth flow across different links—can e-commerce sustain long-term, healthy development.

He further illustrated the harms of low-price involution with an analogy: "A, B, and C are offline retailers. A buys clothes from B, B buys appliances from C, and C buys shoes from A, creating an economic cycle. Later, they discover external e-commerce merchant D offering high-quality, low-price products, diverting all consumption to D and draining capital from the ABC system, forcing them into involution or transformation." In his view, the new rules aim to reverse this unsustainable model.

An e-commerce industry observer emphasized the need to accurately understand regulatory intent: "This document does not reject low prices. Anti-involution ≠ anti-low price."

He argued the rules target three distorted low-price practices: first, "bullying low prices" (platforms forcing merchants to offer discounts or match prices); second, "fraudulent low prices" (e.g., falsely advertised subsidies); third, "capital-driven low prices" (selling below cost to eliminate competitors).

Meanwhile, reasonable low prices driven by technological innovation and efficiency improvements should be encouraged rather than suppressed. The core is to incentivize merchants to win market share through product innovation, service upgrades, and business model optimization—benefiting consumers while allowing merchants to earn legitimate profits.

However, many merchants doubt the rules will bring substantive change. "There will be no real change; when policies are issued, platforms always find ways to cope," a sentiment widely shared among merchants.

Their core concern is that as de facto rule operators and traffic distributors, platforms hold the initiative to define "voluntary" and "activity rules."

"You [merchants] can set high prices, but if you have poor sales, you’ll get no traffic—so you have to cut prices anyway!" one merchant pointed out the practical dilemma: even if explicit mandatory clauses are removed, "soft levers" like traffic allocation and activity resource slots may still trap merchants in a cycle of "passive voluntary" price cuts.

Overall, the new rules mark an important regulatory intervention in platform economy pricing order, resonating widely with merchants.

Yet industry consensus holds that translating rules from text to practice faces multiple challenges: clearly defining "forced" vs. "voluntary" actions, regulating algorithmic "black boxes" in traffic allocation, and establishing effective merchant appeal and rights relief channels. Ultimately, enforcement success will depend on subsequent detailed guidelines, platform adjustments, and sustained, robust routine supervision.

Three Major Challenges for Merchants in Rule Implementation

Based on widespread merchant feedback, implementation faces at least three practical challenges related to rule definition, cost burdens, and dispute resolution mechanisms.

Challenge 1: Blurred Line Between "Active" and "Passive" Price Cuts; Traffic Levers Risk Becoming New "Soft Coercion"

The rules explicitly ban forced price cuts, but merchants often face the dilemma of "voluntary" participation in practice. Many merchants bluntly state: "Platforms never force price cuts—we voluntarily sign up for activities and cut prices on our own."

The crux is that when "no access to key activity resources or traffic without price cuts" becomes an unwritten platform rule, so-called "voluntary" actions are essentially "passive choices" driven by traffic allocation mechanisms.

Merchants lamented: "If you don’t cut prices, you get no activity slots or traffic—how can you break this?" This highlights a key implementation challenge: effectively regulating indirect pressure exerted by platforms through non-explicit means like traffic and algorithms.

Challenge 2: Proliferating Deductions Increase Operational Burdens; Smart Algorithms Expand Regulatory Blind Spots

Current e-commerce operations involve complex deduction items—from late delivery fines to "refund-only" deductions—imposing heavy cost pressures on merchants. Small and medium-sized merchants, in particular, have limited supply chain flexibility and struggle to fully meet platform timeliness requirements.

One seller complained: "To get traffic, everyone promises 24/48-hour delivery, right? Stockouts lead to fines or delisting. How can small sellers keep up with sudden surges in orders?" They called for greater platform flexibility in rule enforcement.

Some merchants also suggested replacing direct fines with a "point deduction system" to achieve regulatory goals without immediate cash flow shocks.

Deeper concerns focus on algorithmic systems like smart promotion: "When smart promotion brings you orders, how can you confirm the platform is being fair?" Merchants distrust algorithmic "black boxes" and potential unfair deductions, citing a lack of effective review and appeal channels.

Challenge 3: Imbalanced Consumer Dispute Resolution; Merchants Call for Independent Arbitration Systems

Under existing platform dispute resolution mechanisms, merchants widely feel disadvantaged. "A third-party customer service system should be established to handle platform disputes," one merchant proposed.

The current model, dominated by in-house platform customer service, is often perceived by merchants as biased toward consumers, with limited avenues for appeal and checks and balances. A relatively neutral, transparent third-party dispute mediation or arbitration mechanism is seen as critical to balancing platform, consumer, and merchant interests and ensuring impartial rule enforcement.

In summary, the new rules represent a crucial first step, but their effectiveness depends on sustained responses to these operational challenges and institutional refinement.

This requires regulators to issue clearer implementation guidelines and case definitions, platforms to proactively adjust traffic allocation, deduction models, and dispute resolution mechanisms, and translate "protecting merchant autonomy" from compliance clauses into business practice.

Only then can the industry shift from destructive "price involution" to healthy competition centered on products and services, achieving long-term ecological win-win outcomes.