China's SAMR Drafts New Rules on Food Delivery Platform Subsidies, Seeking Public Comments Starting June 17
Claire Weston
China's market regulator published draft rules to ban food-delivery platforms from selling below cost or using prolonged, large-scale subsidies to squeeze rivals — a direct shot at the cash-burning playbook that has defined the sector's competition.
What exactly do the draft rules prohibit?
Three core bans: no below-cost pricing, no prolonged large-scale subsidies that crowd out competition, and no forcing merchants to bear subsidy costs.
This means → the classic platform strategy of "lose money first, monopolize later" is being blocked at the regulatory level.
The rules draw on five separate laws — anti-monopoly, anti-unfair-competition, pricing, e-commerce, and food safety — signaling serious legal weight.
Why is the regulator acting now?
The State Administration for Market Regulation (SAMR) flagged a recent surge in platforms "competing on subsidies, competing on price, and controlling traffic flow."
An investigation by the State Council's anti-monopoly office found platforms leveraging capital to grab share and coercing merchants into subsidy programs, fueling irrational industry competition.
In plain terms = the price war has hurt all three sides — merchants subsidize at a loss, riders face income pressure, and the real economy gets squeezed even as consumers see cheaper orders.
What does this mean for platforms and merchants?
Platforms must publicly disclose subsidy campaigns both before launch and after execution, opening them to public oversight — no more black-box deals.
This means → customer-acquisition costs become far more transparent, sharply narrowing the room for blitz-spending market grabs.
For small and mid-size merchants, forced participation in subsidy programs is now off the table — their operational autonomy gains explicit regulatory protection.
How close is this to becoming law?
The public comment period runs June 17 to July 17 — one month.
SAMR said it will revise the draft based on feedback and "move quickly to finalize and issue" the rules.
This signals that regulators' tolerance for the sector's "involution-style" competition has reached a tipping point — the language suggests implementation will not be slow.
Content is for reference only, not financial advice.