China targets food-delivery subsidy abuse in new draft rules
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Summary
China's State Administration for Market Regulation has released draft rules to prohibit abusive subsidy practices in the food-delivery industry, targeting practices such as using capital advantages to seize market share, forcing merchants to participate in platform subsidy programs and selling below cost. The draft will be open for public comment until July 17, 2026.
Market Impact
The draft rules follow April 2026 fines totaling 3.6 billion yuan ($532.7 million) levied against seven e-commerce platforms, including Meituan, Pinduoduo and JD.com, for food safety violations. The new proposals would require platforms to disclose subsidy campaign terms before and after each campaign, prohibit shifting subsidy costs onto merchants and ban pricing below cost. This analysis is informational and avoids any directional trading claims.
Why It Matters
It represents a broadening of Chinese regulatory pressure on food-delivery platforms beyond safety into competitive practices, potentially constraining the subsidy-driven customer acquisition model that has defined the sector.
Key Points
- China's SAMR published draft rules targeting abusive subsidy practices in food delivery, including bans on using capital advantages to seize market share and forcing merchants to participate in subsidy programs.
- The draft prohibits selling below cost, requires transparent disclosure of subsidy campaigns and bars platforms from shifting subsidy costs onto merchants or riders.
- The proposals follow April 2026 fines of 3.6 billion yuan ($532.7 million) against seven e-commerce platforms, including Meituan, Pinduoduo and JD.com, for food-delivery safety violations.
- The draft is subject to public comment until July 17, 2026, covering areas of market order, worker rights and irrational competition in the food-delivery industry.
Key Entities
Evidence
The SAMR was quoted by the publication as saying: 'China's food-delivery platforms exhibit problems such as using capital advantages to seize market share, coercing businesses on their platforms into taking part in su...Supports: Supports the regulatory rationale.
The draft bans subsidies that affect market order and prohibits platforms from forcing merchants to join subsidy programmes or shifting subsidy costs onto them.Supports: Supports the ban details.
In April, SAMR fined seven e-commerce platforms a total of 3.6 billion yuan ($532.7m) for breaches linked to food delivery safety. Pinduoduo, Meituan and JD.com were among those penalised for not properly verifying fo...Supports: Supports the prior enforcement action.