China’s State Administration for Market Regulation has proposed new rules to address competition in the country’s food delivery sector, according to national broadcaster CCTV.

These measures follow heightened competition after JD.com entered the market this summer, prompting rivals Meituan and Alibaba’s Ele.me to raise discounts, which squeezed margins for restaurants and couriers.

Meituan’s shares rose as much as 3%, and JD.com’s 2.5%, in Hong Kong after the announcement.

The draft rules include capping fees charged to restaurants, increasing transparency around subsidies and discounts, and limiting the types of charges platforms can impose on merchants.

The proposed rules also prohibit platforms from forcing merchants to subsidize promotions, a practice that has become more common this year.

🔗 Source: Bloomberg

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