China moves to end ‘irrational’ food-delivery subsidies and the sector’s price wars

Regulators target predatory pricing and merchant coercion, with new rules requiring that tech giants disclose subsidy data and not disrupt the market Chinese authorities introduced draft regulations on Wednesday to crack down on the misuse of subsidies by food-delivery platforms, as Beijing seeks to rein in the sector’s intense competition. The proposed rules, open for public comment until July 17, identify several practices that would be banned, including using subsidies to disrupt the market and selling goods at a loss, according to a statement from the State Administration for Market Regulation (SAMR). “China’s food-delivery platforms exhibit problems such as using capital advantages to seize market share, coercing businesses on their platforms into taking part in subsidies, and triggering irrational competition in the industry,” the regulator said, adding that such cutthroat competition was hurting businesses, delivery drivers and consumers. The draft regulations will ban platforms from using “long-term, large-scale” subsidies to hamper market competition or disrupt market order, according to the SAMR.

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