China Regulates Algorithmic Pricing in E-Commerce: New Rules Take Effect April 2026

China's New Regulatory Rules

China bans e-commerce platforms from forcing lowest prices or abusing algorithms

Beijing moves to protect consumers and merchants, with new 29-article regulation tightening oversight of the fast-growing digital economy.

On December 20, 2025, three Chinese government bodies—the National Development and Reform Commission, the State Administration for Market Regulation, and the Cyberspace Administration of China—jointly issued the "Internet Platform Pricing Conduct Rules." This regulation consists of 29 articles, takes effect on April 10, 2026, and will remain valid for five years until April 10, 2031.

The regulation aims to strictly crack down on unfair pricing practices that abuse algorithms, including price discrimination known as "Big Data Price Gouging" (where returning customers are charged more than new customers) and platforms forcing "lowest price" requirements on merchants. The targets include major e-commerce platforms such as Alibaba, JD.com, and Pinduoduo, as well as their merchant sellers.

Background and Industry Trends

China's e-commerce market is the world's largest, but intense price competition has become the norm. In recent years, platform operators have widely adopted "algorithmic pricing," using algorithms and big data to dynamically adjust prices based on users' purchase history and ability to pay.

However, according to South China Morning Post reporting, many platforms have been forcing merchants to guarantee "lowest prices" and requiring them to set prices lower than competing platforms. Merchants who did not comply faced algorithmic penalties such as lower search rankings and traffic restrictions, effectively pressuring them out of the market.

Additionally, "price discrimination"—where the same product is offered at different prices to different customers—has been a concern. Practices such as showing discounted prices to new customers while charging higher prices to repeat customers have not only damaged consumer trust but have also been criticized as threatening overall market fairness.

A China Daily article points out that these practices have triggered a "race to the bottom," squeezing merchant profitability. This regulation is positioned as a comprehensive solution to these longstanding industry challenges.

Specific Regulatory Content

The new rules clearly define four main prohibitions:

Ban on Algorithmic Price Discrimination

Platform operators and merchants are prohibited from using data and algorithms, platform rules, or other means to set different prices or fee standards for the same products or services under equivalent transaction conditions, based on consumers' willingness to pay, ability to pay, consumption tendencies, or consumption habits—without consumers' knowledge.

This provision directly addresses so-called "Big Data Price Gouging." According to Xinhua News Agency reporting, it aims to protect consumers' right to know and right to choose.

Ban on "Lowest Price" Mandates

Platform operators are prohibited from using their dominant market position to impose "lowest price" contracts on merchants. Specifically, it becomes illegal to use traffic restrictions, search ranking demotions, algorithmic penalties, or other means to force merchants into predatory pricing or exclusive pricing agreements.

Pricing Transparency Requirements

Platforms must implement pricing transparency, algorithm audit mechanisms, consent management systems for the use of personal information in pricing, and communication systems with merchants for fee changes and complaint handling.

In particular, platforms are required to disclose dynamic pricing and discriminatory pricing rules, and to standardize services such as automatic payments, automatic renewals, and automatic deductions.

Algorithm Filing Obligations

Platform operators must complete filing procedures for pricing-related algorithms in accordance with regulations, and cooperate with security assessments and supervision inspections by the Cyberspace Administration and other relevant authorities.

Supervision and Enforcement System

To ensure the regulation's effectiveness, development and reform, market regulation, and internet information departments will supervise pricing conduct in the platform economy according to their respective responsibilities.

According to Bloomberg's analysis, regulatory authorities can cooperate with relevant departments to issue warnings, alerts, and conduct interviews with platform operators and merchants. If necessary, development and reform, market regulation, and internet information departments at the provincial level or above can investigate business conditions.

The regulation also includes leniency measures for those who promptly correct minor violations, establishing mechanisms to encourage platforms to build voluntary compliance systems.

Impact on E-Commerce Operators and How to Adapt

This regulation will significantly affect both domestic and international e-commerce operators doing business in the Chinese market.

Benefits for Merchants

For merchants who have long struggled under price competition pressure, this regulation is welcome news. The ban on "lowest price" mandates is expected to improve their bargaining power with platforms and make it easier to secure reasonable profit margins. Additionally, reduced risk of algorithmic penalties will give them greater freedom in pricing strategies.

Platform Operator Response

Major platforms such as Alibaba, JD.com, and Pinduoduo will need to urgently improve algorithm transparency and build internal compliance systems. Specifically, this includes implementing pricing algorithm audit mechanisms, disclosing pricing rules, and establishing consent procedures for personal information use.

Implications for Global Expansion

As PPC Land's analysis points out, the impact of this regulation extends beyond China's borders. If China-originated platforms such as Pinduoduo's global brand "Temu" adopt similar practices in overseas markets, international scrutiny may intensify.

For Japanese companies as well, this regulation contains important implications. Algorithm transparency and fairness in e-commerce markets are likely to become increasingly important as a global regulatory trend, and proactive responses could lead to competitive advantages.

Practical Response Steps

E-commerce operators doing business in the Chinese market should consider the following responses before the April 10, 2026 effective date:

1. Review pricing algorithms and eliminate discriminatory elements
2. Improve pricing transparency (clarify dynamic pricing rules)
3. Establish consent procedures for using personal information in pricing
4. Build internal audit systems and conduct regular compliance checks
5. Abolish or revise lowest price contracts and exclusive pricing agreements

Conclusion

China's "Internet Platform Pricing Conduct Rules" is a comprehensive regulatory framework for pricing practices using algorithms and big data. Both platform operators and merchants need to prepare for the April 10, 2026 effective date.

This regulation aims to curb the "race to the bottom" in the Chinese e-commerce market and build a fair competitive environment. At the same time, it clearly demonstrates the policy intent to balance consumer rights protection with healthy development of the platform economy.

According to China Policy's analysis, this regulation symbolizes China's platform economy supervision shifting from "emergency response governance" to "systematic institutional development."

In the global e-commerce market as well, algorithm transparency and fairness are emerging as important themes. China's regulation will attract attention as a leading example for policymakers in other countries. Japanese companies are also expected to monitor these international regulatory trends and take proactive measures.

References

• Internet Platform Pricing Conduct Rules (Chinese - Official Notice)
• China bans e-commerce platforms from forcing lowest prices or abusing algorithms
• China issues rules to regulate pricing practices of internet platforms
• Protecting Operators' Right to Independent Pricing and Consumers' Legitimate Rights (Xinhua - Q&A)
• China Tightens Oversight of Internet Platform Pricing Practices
• China mandates new rules targeting platform pricing and behavioral tracking compliance
• Beijing releases new rules to regulate internet platform pricing behaviour