Refer China: China Proposes Ban on Food-Delivery Subsidies, Deadline July 17

China bans food-delivery subsidies and loss-leading pricing. Public comment until July 17. Fines: 3.6bn yuan on Meituan, JD.com, Pinduoduo.

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China

Food Delivery

Subsidy Ban

Price War Crackdown

Regulatory Crackdown

Chinese regulators have rolled out new draft regulations targeting improper subsidy practices by food-delivery platforms, stepping up efforts to rein in cutthroat industry competition and foster a healthier, more sustainable market ecosystem. Released on Wednesday by the State Administration for Market Regulation (SAMR), the proposed rules aim to rectify long-standing chaotic competition driven by capital-fueled subsidy wars that have hurt merchants, delivery workers and consumers.

Open for public consultation until July 17, the draft regulation explicitly bans a string of disruptive practices, including market manipulation via improper subsidies and loss-leading pricing strategies. The watchdog pointed out that China’s food-delivery sector has long been plagued by problematic competition behaviors. Major platforms leverage capital advantages to aggressively seize market share, force in-store merchants to participate in subsidized promotions, and trigger industry-wide irrational rivalry.

Such vicious competition has created a lose-lose situation across the industrial chain. It squeezes merchants’ profit margins, undermines the income stability of delivery riders, and distorts normal market pricing, ultimately compromising consumer benefits and disrupting orderly industrial development, according to the SAMR.

Additionally, the draft rules forbid deep-pocketed platforms from engaging in monopolistic and unfair competition, as well as selling products below cost to squeeze out smaller competitors. To enhance transparency and supervision, platforms are required to make full public disclosures before and after launching each subsidy campaign. The document also clarifies corresponding legal obligations and liability mechanisms for irregular subsidy behaviors, laying a solid institutional foundation for standardized market supervision.

The latest crackdown marks another key step in China’s intensified regulation of platform economy sectors. In recent years, authorities have ramped up oversight over food-delivery platforms, covering food safety management, gig workers’ employment rights and benefits, and predatory price wars.

In a landmark penalty in April this year, the SAMR imposed a total fine of 3.6 billion yuan (US$532.7 million) on seven e-commerce and food-delivery giants, including Meituan, Pinduoduo and JD.com. The penalties were issued for regulatory violations such as inadequate verification of catering business qualifications and allowing unlicensed “ghost kitchens” to operate illegally, demonstrating the regulator’s resolve to standardize the platform business environment.