🧠 Food for thought

Implications, context, and why it matters.

China’s crackdown on “involution-style” competition is backed by new laws and specific campaigns

• The meeting sits within a wider enforcement drive, including a nationwide campaign launched by the State Administration for Market Regulation (SAMR) in 2025 aimed at “irrational competitive practices” such as destructive price wars 1.
• China’s revised Anti-Unfair Competition Law, effective October 15, 2025, supports the effort. It bars platform operators from forcing merchants to sell below cost 2.
• Regulators are also drafting changes to the Pricing Law, first enacted in 1998. The proposal would cover services and ban unfair pricing that uses data and algorithms, technology, or rules 3.
• The moves respond to recent turbulence, including an early 2025 price war where over 60 car models cut prices in China. Industry-wide net margins fell to 4.3% last year, according to the China Automobile Dealers Association (an industry group representing car dealers in China) 3.

The crackdown extends beyond China’s borders and into platforms’ algorithms

• The revised Anti-Unfair Competition Law reaches beyond China through an extraterritoriality clause. It can apply to conduct outside China if it disrupts the domestic market or harms local operators or consumers 4.
• Draft compliance guidelines push enforcement into platform technology. They call on platform operators to run targeted screening and dynamic monitoring of core algorithmic models, including pricing algorithms, recommendation systems, ranking and advertising placement strategies 5.
• The same draft also blocks dominant platforms from using “application-layer or network-layer blockade or exclusion measures” against transaction counterparties. This covers technical “walled garden” conduct that blocks or restricts interoperability with rivals or partners 5.
• Regulators have already backed enforcement with large penalties, including a US$2.8 billion fine against Alibaba for abuse of market dominance 6.