Key Points
- The State Administration for Market Regulation (国家市场监督管理总局) summoned seven major Chinese tech platforms, including Alibaba, Douyin, and Tencent, for regulatory discussions on February 13.
- Authorities explicitly instructed these companies to comply with four key laws, including the Anti-Unfair Competition Law and the E-commerce Law of the People’s Republic of China.
- A primary focus is to eliminate “involutionary” or cut-throat competition (Neijuan-shi Jingzheng 内卷式竞争), which involves destructive practices like predatory pricing rather than value creation.
- This action underscores China’s commitment to intensifying regulatory oversight, ensuring fair competition, prioritizing consumer protection, and fostering sustainable development in the platform economy.
On February 13, the State Administration for Market Regulation (Guojia Shichang Jiandu Guanli Zongju 国家市场监督管理总局) called in seven of China’s biggest platform enterprises for regulatory talks.
The companies summoned included:
- Alibaba (Alibaba 阿里巴巴)
- Douyin (Douyin 抖音)
- Baidu (Baidu 百度)
- Tencent (Tengxun 腾讯)
- JD.com (Jingdong 京东)
- Meituan (Meituan 美团)
- Taobao Flash Sale (Taobao Shangou 淘宝闪购)
This regulatory action signals China’s continued focus on reining in platform economy dominance.
And it’s not the first time Beijing has taken this approach.
Over the past few years, we’ve seen increased scrutiny on big tech platforms—everything from antitrust investigations to stricter data privacy rules.
This latest move shows regulators aren’t slowing down anytime soon.
What the Regulator Actually Told These Companies
During the meeting, authorities made one thing crystal clear: these companies need to follow the rules.
Specifically, the State Administration for Market Regulation instructed the seven platform enterprises to strictly comply with four key pieces of legislation:
- The Anti-Unfair Competition Law of the People’s Republic of China
- The Price Law of the People’s Republic of China
- The Law of the People’s Republic of China on the Protection of Consumer Rights and Interests
- The E-commerce Law of the People’s Republic of China
The regulator wasn’t vague about expectations either.
Authorities explicitly emphasized that enterprises must proactively fulfill their primary responsibilities and further standardize promotional and marketing activities on their platforms.
Translation: stop the sketchy practices.
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The Real Issue: “Involutionary” Competition Is Hurting the Market
- Zero-Sum Tactics: Aggressive moves that gain market share without expanding the total value of the market.
- Predatory Pricing: Selling products at a loss specifically to drive smaller competitors out of business.
- Deceptive Marketing: Using misleading algorithms or fake reviews to lure consumers into lower-quality purchases.
- Resource Waste: Massive capital expenditure on subsidies and marketing instead of R&D or service upgrades.
Here’s where it gets interesting.
The regulator issued a formal reminder to eliminate all forms of what they call “involutionary” or cut-throat competition (Neijuan-shi Jingzheng 内卷式竞争).
For those unfamiliar with the term, this refers to unhealthy competitive dynamics where companies engage in destructive practices that create zero real value—think predatory pricing, deceptive marketing, or other tactics designed purely to undercut competitors rather than serve customers better.
It’s competition that hurts everyone: the platforms lose money, consumers get misled, and the entire ecosystem becomes less efficient.
The regulator’s directive aims to collectively maintain a market environment characterized by fair competition and to promote the continuous innovation and healthy development of the platform economy.
The logic here is straightforward: market growth should be driven by value creation, not by destructive competitive tactics that harm the broader economic ecosystem.
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What This Means for Investors and Founders
This regulatory action is a watershed moment for the Chinese tech landscape.
Here’s what you need to understand:
- Regulatory oversight in China’s platform economy is intensifying — Beijing is committed to shaping how these mega-platforms operate, and they’re not shy about enforcement
- Compliance is non-negotiable — companies that ignore these directives risk penalties, fines, or operational restrictions
- The focus is shifting from rapid growth to sustainable competition — regulators want platforms to innovate and create genuine value, not just win market share through destructive tactics
- Consumer protection is a priority — expect stricter enforcement around marketing practices, pricing transparency, and consumer rights
For founders building on these platforms or competing against them, this creates both challenges and opportunities.
The challenge: operating in a heavily regulated environment requires careful compliance.
The opportunity: as the big platforms are forced to clean up their acts, smaller, more agile competitors can gain ground by operating ethically and serving customers better.
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The Bigger Picture: China’s Tech Regulation Playbook
This summoning of the “Big Seven” isn’t an isolated incident.
It reflects a broader regulatory philosophy in China:
- Beijing views platform monopolies as threats to fair competition and consumer welfare
- The government is willing to intervene directly to shape market dynamics
- Regulation is becoming a permanent feature of the platform economy landscape
For the tech world at large, it’s a reminder that operating at scale means operating under scrutiny.
Whether you’re building in China or competing with Chinese platforms globally, understanding these regulatory dynamics is essential.
Key Takeaways on Platform Enterprise Regulation in China
- Seven major Chinese platform enterprises were summoned by the State Administration for Market Regulation for regulatory compliance talks
- Authorities demanded strict adherence to anti-unfair competition, price, consumer protection, and e-commerce laws
- The focus is on eliminating “involutionary” cut-throat competition that destroys value instead of creating it
- Regulators seek to foster fair competition and sustainable innovation in the platform economy sector
- This action signals China’s commitment to enforcing compliance and protecting consumers in the digital marketplace
The bottom line: platform enterprise competition in China is being reset around fairness, transparency, and genuine value creation.
Companies that adapt to this new regulatory reality will thrive.
Those that don’t will face consequences.
Welcome to the new era of regulated platform economy competition in China.
