New Price Law Takes Effect: Platforms Prohibited from Forcing Merchants to Sell at Low Prices

This farce of “forced low pricing” has been playing out in the e-commerce industry for nearly a decade. The logic of platforms has always been terrifyingly straightforward: they want GMV, user growth, and pretty numbers on their financial reports. As for the survival of merchants, that’s never part of their performance review scope. Years ago, a leading e-commerce platform launched a “9.9 Yuan Free Shipping Festival,” requiring all settled merchants to participate, or their products would be delisted. A veteran bamboo-weaving artisan, a practitioner of intangible cultural heritage with 30 years of experience, had a cost of 38 yuan per bamboo woven lamp (including materials and labor) — even 9.9 yuan with free shipping couldn’t cover the cost of the bamboo strips. He refused to join the promotion, and the next day his store disappeared from search results. He eventually had to close his online store, and now runs a street stall in his hometown county. His monthly income is less than a fraction of what he earned in a single month when selling online. Another fresh produce merchant was required by the platform to sell apples at 3 yuan per catty, even though his cost was 4 yuan per catty. He refused, and the platform pushed his store to the 20th page of search results, making it virtually invisible to users. He ended up losing 200,000 yuan, closed his store, and became a food delivery rider.

Many people say “merchants can just choose not to use that platform,” but look at the current market: top platforms account for 90% of online traffic. Where else can small merchants go? The old Price Law enacted in 1998 never anticipated the emergence of the platform economy. It only stipulated that “operators shall not engage in predatory pricing below cost,” but said nothing about “platforms being prohibited from forcing operators to engage in such predatory pricing.” Platforms that exploit loopholes rebrand “recommended participation in promotions” as “mandatory requirements,” and turn “lowest price commitments” into overbearing terms like “shops will be banned for refusing to lower prices.” Behind every so-called “voluntary” act lies the muzzle of traffic monopoly pressed against merchants’ foreheads. Every “suggestion” from a monopolist is a sugar-coated muzzle.

The implementation of the newly revised Price Law is equivalent to directly disarming the gun pressed against merchants’ foreheads. The law clearly states: “Platform operators shall not use service agreements, transaction rules, technical means, or other methods to force or coerce platform merchants in disguised form to sell goods at prices below cost.” Do not underestimate these few dozen words — they plug all the loopholes platforms previously exploited. “Limiting traffic for non-participating merchants” is disguised coercion; “raising commissions for merchants who refuse to lower prices” is disguised coercion; “revoking event eligibility for merchants who refuse to sign lowest price agreements” is also disguised coercion. Under the old regulations, when merchants reported platforms for forced low pricing, regulators could only say “this is a voluntary service agreement signed by both parties.” Now the new regulation clarifies the primary liability of platforms, leaving them no room to evade responsibility.

Shortly after the new regulation took effect last month, a merchant reported that a platform required all merchants participating in the 618 presale event to set presale prices lower than the final transaction price of last year’s Double 11, or their presale eligibility would be revoked. Regulators conducted on-site inspections of the platform that same day. The platform was not only fined 5 million yuan, but also required to compensate all affected merchants with equivalent traffic packages. Stores that had been demoted in search rankings also had their weight restored. In the past, merchants could only swallow such grievances in silence. Now, using the law as a shield, they finally dare to say “no” to platforms. Do you really think those 9.9 yuan free shipping bargains you scored were not meat carved from merchants’ own bones?

Sister Li still feels like she’s dreaming when talking about this. The day after the new regulation took effect, she adjusted the price of her sofas back to 2,699 yuan, 700 yuan higher than the 1,999 yuan the platform had forced her to charge. She expected traffic to drop, but it actually increased by 30%. Regular customers all know her products are high quality — when she was forced to sell at the low price, many thought she was cutting corners. Now that the price is back to normal, they trust her more. Last month, her repeat purchase rate was three times higher than before. The elderly bamboo-weaving artisan who closed his store to run a street stall reopened his online store last month, selling bamboo woven lamps at 68 yuan each. Orders are now booked through next month. He said, “I no longer have to use inferior bamboo strips to meet low price requirements. Now I make 20 yuan per lamp, which is much better than running a street stall.” A young woman running an original jewelry brand was previously forced by the platform to sell silver jewelry at 99 yuan, even though the cost was 120 yuan. After raising the price back to 199 yuan, her sales actually improved, as customers said, “This price feels like real silver — I didn’t dare buy it when it was 99 yuan.”

This is not to ban merchants from running promotions, but to stop platforms from forcing all merchants down the low-price path. You can focus on cost-performance if you want, or premium products if that’s your niche. Not everyone has to cram onto the narrow plank bridge of 9.9 yuan free shipping, where the only options are cutting corners to cheat consumers, or going bankrupt and cheating suppliers. Merchants’ profits are not platforms’ KPIs, and consumer benefits should not be built on merchants’ bankruptcies. A merchant selling maternal and infant products once said that to meet the platform’s lowest price requirement, he had to reduce the fluff pulp content in diapers from 50% to 30%. Now he no longer has to do that — he can finally go back to using high-quality materials, and the positive review rate for his products jumped by 40%.

Of course, platforms won’t just accept this lying down — they will inevitably switch to new tactics. Some merchants have already noticed that while platforms no longer force price cuts, they are raising technical service fee rates, or requiring merchants to sign performance-based agreements: “We will give you X amount of traffic, and you must achieve Y sales volume, or we will deduct your security deposit.” Now more than ever, keep all evidence: any notices from the platform, chat logs, screenshots of backend traffic data — save them all. If you run into issues, file a complaint directly with the regulatory authorities. The new regulation is now our strongest backing.

For ordinary consumers, you may see fewer flashy slogans like “9.9 yuan free shipping with free gifts” plastered all over the screen in the future. But the products you buy will be more reliable, and after-sales service will be more dependable. You won’t end up buying a fake phone at a low price and getting no response when you complain to the platform. We often talk about “boosting consumption,” but if consumers only buy cheap junk, and merchants lose money on every sale, how can this cycle sustain itself? After all, the e-commerce industry has come a long way, finally shifting from “traffic is king” to “rules are king.” Businesses that survive by squeezing merchants will be eliminated sooner or later. Those who focus on making quality products have finally ushered in their spring.

Laws are never meant to give special privileges to any single party. They are the safety net for everyone who plays by the rules: law-abiding merchants won’t be forced to sell at a loss, law-abiding consumers won’t end up buying fakes, and law-abiding platforms won’t have to resort to underhanded tactics to hit their performance targets.