Trip.com hit with massive fine, penalty

China's antitrust action against leading online travel service provider Trip.com Group has moved scrutiny of the platform economy beyond explicit exclusivity agreements to the algorithms, traffic-allocation systems and contractual structures that can produce similar effects, experts said.

The State Administration for Market Regulation said on Saturday that it had confiscated 1.658 billion yuan ($245 million) in illegal gains from Trip.com, operator of the Ctrip travel platform, and imposed a 3.521 billion yuan fine, equivalent to 7.5 percent of its sales in China in 2025. The two amounts total 5.179 billion yuan. Separately, Trip.com was ordered to refund about 122.78 million yuan in booking deposits withheld from hotels.

The regulator described the action as China's first antitrust case in the online travel industry.

The investigation found that Trip.com had abused its dominance since 2020 by offering traffic and other benefits to "special-label" hotels on condition that they sell online room inventory exclusively through its platform. It also imposed an "all-network lowest-price" requirement on "gold-label" and unlabeled hotels, enforced through automated price adjustments, traffic restrictions, removal of merchant labels and deductions from booking deposits.

"This case shows that antitrust oversight of the platform economy has entered a more routine, professional and granular stage," said Feng Zhaofeng, a partner and lawyer at Beijing-based King & Capital Law Firm.

Earlier platform cases focused largely on explicit "choose-one-of-two" demands, Feng said, while the Trip.com investigation examined how contracts, merchant classifications, traffic incentives and algorithms worked together to restrict competition.

"The regulator has moved from looking at the surface form of the conduct, to examining the underlying operating mechanism and its actual effects," he said.

Shi Jianzhong, a professor at China University of Political Science and Law, said in a note that this was the first platform-economy case to combine an order to stop unlawful conduct, confiscation of illegal gains and a fine.

The 7.5 percent penalty rate was the highest imposed in a Chinese platform-economy antitrust case, near the upper end of the statutory range of 1 to 10 percent of annual sales. By comparison, Alibaba and Meituan were fined 4 percent and 3 percent of their domestic sales in 2021, respectively. The comparatively high rate reflected the seriousness of the conduct, while the combination of behavioral and monetary remedies was aimed at correcting the underlying business mechanism rather than merely imposing a one-off financial penalty, Shi added.

The case also establishes a clearer legal boundary for lowest-price clauses. Jiao Haitao, a professor at China University of Political Science and Law, said this was the first time China's antitrust authorities had directly penalized an "all-network lowest-price" clause as an independent abuse of market dominance.

Such arrangements are known internationally as platform "most-favored-nation" clauses. Jiao said Trip.com's rules went further because some hotels had to offer prices below those on rival platforms, with automated tools and penalties ensuring compliance.

Although the requirement initially appeared to secure low prices for users, a rival charging lower commissions could not translate that advantage into cheaper rooms because Trip.com required the hotel to match or beat its price, Jiao said. Pressure on hotel margins could also lead to poor service and investment, while weaker platform competition could ultimately limit consumer choice and innovation.

A veteran tourism industry professional told Caijing Magazine that while merchants are unlikely to leave Trip.com in large numbers, the penalty will have a major deterrent effect across the online travel industry, with the removal of exclusivity and lowest-price requirements giving them greater control over platform choice and pricing.

Shi said that the case's legal and economic value lay in restoring competition. More broadly it addressed two key priorities in platform-economy governance: curbing "involution-style" competition, in which businesses are pushed into unsustainable price-cutting, and improving the business environment by making platform rules fairer and more predictable.

The enforcement action aligns with the country's 15th Five-Year Plan (2026-30), which calls for stronger oversight of platform companies' use of data, algorithms, traffic and rules while promoting the innovative and healthy development of the platform economy.