China proposes rules to punish illegal e-commerce pricing

China's market regulator issued draft rules on Friday to punish illegal pricing activities, including heavy subsidies and the practice by online platforms of charging different prices based on customers' purchasing behaviour. The rules are the latest in an effort by the State Administration for Market Regulations (SAMR) to rein in China's free-wheeling platform economy, which has seen it levy fines, aunch investigations and issue warnings to booming e-commerce giants.

China's market regulator issued draft rules on Friday to punish illegal pricing activities, including heavy subsidies and the practice by online platforms of charging different prices based on customers' purchasing behaviour.

The rules are the latest in an effort by the State Administration for Market Regulations (SAMR) to rein in China's free-wheeling platform economy, which has seen it levy fines, aunch investigations and issue warnings to booming e-commerce giants. "The pricing practices have been widespread among online platforms and it is a hidden problem to ordinary consumers because it's not very easy to notice," said Lu Zhenwang, chief executive officer of Shanghai-based Wanqing Consultancy.

Consumers over the years have complained on social media that e-commerce platforms don't charge the same price for the same offerings. Among the practices banned in the rules proposed on Friday are subsidies that cut the price of a product to below cost.

Violation of the rules could incur a fine of 0.1% to 0.5% of a business' annual sales or even suspension of operations, according to the SAMR. In April, SAMR fined Alibaba a record 18 billion yuan ($2.78 billion) for abuse of its dominant market position and announced an antitrust investigation into Meituan in April. ($1 = 6.4808 Chinese yuan renminbi)