Summary of Key Points
This news article focuses on the specific actions and outcomes of the State Administration for Market Regulation in addressing "involutionary" competition during the first half of 2026. In response to the vicious cycle where companies compete by cutting prices at the expense of quality, regulatory authorities have taken measures in five areas: imposing severe penalties, anti-monopoly reforms, improving regulations, enhancing quality supervision, and removing market barriers. A total of 3.5 billion yuan was fined on seven e-commerce platforms, and cases such as "ghost deliveries" and "special supply wines" were investigated. The platform Huolala was also urged to reduce the commission rates charged to drivers. Several new regulations were introduced to address systemic flaws, with the aim of shifting the economy from a model characterized by low prices and poor quality towards higher-quality development.
Detailed Analysis
1. Platforms Fined for 3.5 Billion Yuan: Targeting Issues Such as "Ghost Deliveries" and "Special Supply Wines"
"Ghost deliveries" refer to deliveries from unlicensed, substandard food establishments that operate without proper hygiene standards, with platforms allowing them to operate unchecked, thus deceiving consumers. This time, regulatory authorities fined seven platforms, including Pinduoduo, Meituan, and JD.com, for a total of 3.597 billion yuan. Even the legal representatives and food safety directors of these platforms were fined nearly 20 million yuan each, emphasizing that platforms bear significant responsibility and cannot evade consequences.
Additionally, cases involving "special supply wines" were investigated. These wines were sold at high prices under the guise of being "exclusive" or "specially supplied," but they were actually counterfeit. The authorities traced the source, shut down 52 illegal operations, seized 75,200 boxes of fake wine, and arrested 40 suspects, completely dismantling the illicit supply chain.
2. Serious Anti-Monopoly Efforts: Alleviating Drivers' Burdens and Helping Companies Break Free from Involution
To combat platform monopolies, regulatory authorities took two practical steps:
- Reforms at Huolala: Previously, Huolala used algorithms to lower driver fees and implemented an "exclusive vehicle sticker" system (drivers could only accept orders from the platform). After the reforms, the commission rate was reduced from 11% to 9%, saving drivers approximately 1.3 billion yuan annually, and 120 million yuan in unnecessary fees were refunded. This change has freed drivers from the pressure to accept low-price orders.
- Regulating Mergers and Acquisitions: In industries prone to involution, such as automobiles, photovoltaics, and lithium batteries, the authorities reviewed 52 merger cases and approved reasonable acquisitions (e.g., smaller companies merging to become stronger), preventing mutual price-cutting competition.
3. New Regulations to Curb Involution
Since February this year, three new regulations have been implemented to fundamentally prevent involution:
- Stopping Administrative Monopolies: These regulations address local governments' practices of favoring local businesses, removing barriers like "glass doors" and "rolling shutter doors" to ensure fair competition.
- Platform Rule Management: Platforms are now required to publicly announce any changes to their rules in advance and are held accountable for ensuring they do not force businesses to compete by setting low prices.
- Regulations for Live Commerce: Rules have been established to prevent live-streamers from selling counterfeit products or making false claims, protecting consumers from deceptive practices.
Moreover, the "Commercial Secret Protection Regulations" were revised to prevent the theft of intellectual property that could exacerbate involution, and the "Management Measures for Dishonesty Lists" were strengthened with heavier penalties for commercial bribery. The "Price Law" is also being amended to clarify the criteria for determining unfair price dumping.
4. Quality and Credit: Comprehensive Supervision from Products to Business Integrity
To break the cycle of low prices and poor quality, regulatory authorities have intensified quality inspections:
- Product Sampling: This year, plans to sample 173 types of key products (e.g., electronics and construction materials), with over 16,000 batches in total, an 8% increase from last year. Online products account for 67% of the samples (up from 57%) as a focus on addressing low-quality goods sold online.
- CCC Certification: The authorities revoked the certifications of 11 unqualified institutions and eliminated 1,700 non-compliant regulations to ensure product safety.
In terms of credit, the "Serious Illegal Dishonesty List" is used to penalize companies involved in commercial bribery and false advertising, making it difficult for them to operate in various fields due to their past misconduct.
5. Removing Barriers to Unify the Market
A major cause of involution is the lack of a unified market. Regulatory authorities have launched a campaign to remove obstacles, focusing on four issues:
- Impeding Fair Access: For example, local regulations that prevent foreign companies from entering the market.
- Restricting Free Trade of Goods: Preferential treatment for local products.
- Differential Qualification Requirements: Differences in qualification standards between domestic and foreign companies.
- Secretive Bidding Practices: Favoritism in bidding processes.
The authorities have also strengthened the "Fair Competition Review" process, ensuring that all government policies promote fair competition.
Conclusion
This regulatory effort is not a temporary measure but a comprehensive approach involving penalties, new regulations, and platform reforms. The goal is to shift companies from competing on price to competing on quality, ultimately providing consumers with reliable products and promoting higher-quality economic growth. Regulatory authorities will continue to take a multi-pronged approach to making the fight against involution a sustained effort.