Chinese authorities uncovered more than 10,000 unfair competition cases nationwide in the first half of this year alone. They imposed fines totaling roughly 800 billion won on seven major e-commerce platforms, including JD.com, Taobao and Meituan. Amid sluggish domestic demand, Beijing is sharply tightening regulatory control over "neijuan" (involution, or self-destructive) competition, which distorts market order and fuels deflationary pressure.
China's State Administration for Market Regulation said on the 7th that it carried out 16 special actions in the first half of the year for an in-depth crackdown on neijuan-style competition. Unfair competition cases uncovered nationwide in the first half totaled 11,465, of which 2,005 involved false online advertising and commercial defamation. Authorities also uncovered 15,000 illegal advertising cases, imposing fines of 69.29 million yuan.
In particular, the regulator fined seven e-commerce platforms, including Taobao, Meituan and JD.com, a combined 3.597 billion yuan (approximately 799.4 billion won) for turning a blind eye to the "ghost delivery" problem, in which vendors operate delivery-only businesses without actual physical premises. Platform representatives and food safety officers were also hit with additional penalties totaling 19.68 million yuan.
"Neijuan" is a Chinese neologism describing a phenomenon in which companies engage in price-cutting competition to secure market share, even selling below cost, eroding profitability across entire industries. Authorities believe such low-price competition undermines corporate investment in research and development and quality improvement, and can ultimately harm consumers in the long run.
The authorities are also strengthening oversight of platform algorithms and price competition. The State Administration for Market Regulation disclosed antitrust corrective measures for freight platform Lalamove, saying the company halted algorithm-driven inducements to lower freight rates and abolished its exclusive vehicle sticker rules. As a result, the platform's commission rate fell from about 11% to around 9%, and drivers' burden is estimated to shrink by more than 1.3 billion yuan annually. Improperly collected fees of 120 million yuan were also refunded.
The authorities are also raising the regulatory bar on mergers and acquisitions and monopolistic practices by platform companies. The State Administration for Market Regulation said it conditionally approved Tencent's acquisition of a stake in audio platform Ximalaya and is proceeding with the handling of a Ctrip monopoly case. In sectors with high risks of excessive competition, such as automobiles, solar power and lithium batteries, the regulator completed 52 merger reviews in the first half of the year alone. The authorities plan to guide companies out of cutthroat competition through mergers, acquisitions and restructuring.
The Chinese government is devoting efforts to rooting out neijuan based on its judgment that low-price competition is acting as an obstacle to domestic demand recovery and industrial upgrading. Last December, the Central Economic Work Conference designated the "in-depth rectification of neijuan-style competition" as a key economic task for this year. This year's Government Work Report also pledged to comprehensively deploy production capacity adjustments, stronger standards, price crackdowns and quality supervision, alongside reinforced antitrust and anti-unfair competition measures. The authorities plan to push institutional improvements targeting low-price dumping and abuse of platform rules, and to continue measures to force out insolvent companies in overcompetitive industries such as batteries and solar power.
