China Moves to Address Algorithm Driven Price Manipulation with New Antitrust Guidelines
China’s top market regulator has taken a major step toward addressing the growing influence of artificial intelligence on digital commerce by releasing new draft guidelines focused on antitrust compliance for major online platforms. The State Administration for Market Regulation, commonly known as SAMR, published the proposed rules over the weekend, outlining how advanced algorithms and data driven systems can quietly shape prices, influence competition and create unfair advantages in the rapidly expanding online economy.
The draft, titled Anti Monopoly Compliance Guidelines for Internet Platforms, highlights how modern technology can be used to engage in harmful behaviour that is difficult for authorities and consumers to detect. SAMR warned that as digital platforms grow in size and sophistication, they have the ability to use their technological strength and market presence to tilt the playing field against competitors or restrict choices for users.
One of the central concerns raised in the document is the use of coordinated algorithms that could enable silent forms of collusion between platforms. According to SAMR, algorithms that are designed to monitor competitors and adjust prices or commission fees automatically can result in price patterns that mirror traditional collusion, even without direct communication between companies. This risk increases when major platforms control large pools of data that allow them to predict market conditions with high accuracy.
The draft also addresses the issue of dominant platforms requiring merchants to sign exclusive agreements. Regulators noted that such arrangements can discourage healthy competition by preventing merchants from operating on multiple platforms, ultimately reducing visibility and choice for consumers. SAMR stated that these practices could limit opportunities for smaller or emerging platforms that rely on merchant participation to grow.
Another concern is the use of excessive subsidies, which may appear to benefit consumers in the short term but can weaken competitors that do not have the financial resources to match such strategies. The guidelines caution that subsidies offered without clear economic justification could distort market conditions and push smaller players out of the industry entirely.
The document also raises questions about what it describes as unreasonable refusals by platforms to allow merchants to open stores or access essential services. SAMR emphasised that online platforms serve as critical infrastructure in the digital economy, and denying access without valid grounds may amount to exclusionary conduct.
Overall, the proposed guidelines reflect China’s effort to keep pace with new forms of market power that rely on artificial intelligence, big data and automated decision making. By identifying these emerging risks, SAMR aims to strengthen oversight and ensure that innovation in the digital economy develops in a fair and transparent environment.
