How Does China’s AML Apply to Digital Platform Companies?

The application of China’s Anti-Monopoly Law (AML) to digital platform companies has been one of the most dynamic and consequential areas of competition law enforcement in China over the past five years. Between 2020 and 2025, Chinese regulators dramatically escalated their scrutiny of platform economy firms, imposing record-breaking fines, issuing comprehensive regulatory guidelines, and fundamentally reshaping the competitive landscape for digital platforms operating in or accessing the Chinese market. This FAQ provides a detailed examination of how the AML applies to digital platform companies, including the unique analytical frameworks developed for the platform economy, key enforcement cases, regulatory guidelines, and practical implications for platform operators.

The Regulatory Framework: Anti-Monopoly Guidelines for the Platform Economy

In February 2021, SAMR issued the Anti-Monopoly Guidelines for the Platform Economy (the “Platform Guidelines”), which set out a comprehensive framework for applying the AML to digital platforms. The Platform Guidelines were updated in 2023 to reflect the 2022 AML amendments and evolving enforcement experience. Key features of the Platform Guidelines include:

• Definition of platform economy: The guidelines define platform economy as economic activities based on internet platforms that use data, algorithms, and digital technologies to facilitate transactions between multiple parties. Platforms covered include e-commerce marketplaces, social media platforms, search engines, app stores, ride-hailing platforms, food delivery platforms, online travel agencies, and digital payment systems.
• Recognition of platform-specific competitive dynamics: The guidelines acknowledge that platform markets have unique characteristics, including: network effects (direct and indirect), economies of scale and scope, data-driven competitive advantages, multi-sided market structures, zero-price services, and algorithmic pricing and coordination.
• Analytical framework: The guidelines provide a structured approach to defining relevant markets in the platform economy, assessing market power, identifying anti-competitive conduct, and evaluating efficiencies and justifications.
• Prohibition on abusive conduct by dominant platforms: The guidelines elaborate on how Article 22 of the AML (abuse of dominance) applies to platforms, including specific theories of harm for self-preferencing, data monopolization, refusal to interoperate, predatory pricing using subsidized services, and exclusive dealing arrangements.
• Scrutiny of platform M&A: The guidelines address merger control in the platform economy, including the review of “killer acquisitions” of innovative startups by dominant platforms, even where the transaction value does not meet standard turnover thresholds.

Market Definition in the Platform Economy

Defining the relevant market is the foundational step in any AML analysis, but it is particularly challenging in the platform economy due to multi-sided markets, zero-price services, and dynamic competition. The Platform Guidelines and subsequent enforcement cases have established several important principles:

• Separate market definition for each side of the platform: A multi-sided platform may operate in multiple relevant markets simultaneously. For example, an e-commerce platform operates in (a) the market for online retail marketplace services to merchants and (b) the market for online retail marketplace services to consumers. Both must be analyzed, and each may have different competitive dynamics.
• Zero-price markets can be relevant markets: The fact that a service is provided free of charge to consumers does not mean there is no relevant market. The Platform Guidelines recognize that zero-price services (e.g., search, social networking, mapping) are part of a competitive process involving non-price dimensions such as data collection, advertising exposure, and service quality.
• Innovation and data markets: The guidelines recognize that competition in the platform economy may occur in innovation markets (R&D for platform technologies) and data markets (markets for the collection, processing, and commercialization of user data).
• Dynamic market definition: Platform markets can evolve rapidly, and market definition should reflect the dynamic nature of competition, including the potential for entry by adjacent platforms and technological disruption.

Abuse of Dominance in the Platform Economy: Key Enforcement Cases

The Alibaba Case (2021)

The most significant platform economy enforcement action under the AML was SAMR’s April 2021 decision fining Alibaba Group RMB 18.228 billion (approximately USD 2.8 billion) for abusing its dominant position in the Chinese online retail platform services market. SAMR found that Alibaba had abused its dominance by requiring merchants to sign “exclusive cooperation agreements” that prohibited them from listing on competing platforms (such as JD.com and Pinduoduo), imposing penalties on merchants that violated this exclusivity, and using data and algorithms to monitor and enforce compliance.

Key aspects of the Alibaba decision include:

• Market definition: SAMR defined the relevant market as the market for online retail platform services in China, finding that this market was distinct from offline retail and from online wholesale (B2B) platforms. The decision noted that multi-sided platform effects made market definition complex but concluded that the services provided to merchants and consumers were complementary and part of the same platform.
• Dominance finding: SAMR found Alibaba held a dominant position based on: (a) high market share (over 50 percent by GMV, transaction volume, and active merchant/consumer metrics); (b) significant market concentration (HHI exceeding 2,500); (c) high barriers to entry driven by network effects, data advantages, and brand recognition; (d) the platform’s ability to influence prices and terms; and (e) the financial resources and technological capabilities of the Alibaba ecosystem.
• Abusive conduct: The “either-or” choice requirement forcing merchants to select Alibaba exclusively was found to be an abuse of dominance that foreclosed competing platforms from accessing a critical base of merchants, thereby entrenching Alibaba’s dominant position and harming competition, consumer choice, and innovation.
• Remedies: In addition to the fine, SAMR ordered Alibaba to cease the exclusive dealing practices, implement a comprehensive compliance program, file annual compliance reports with SAMR for three years, and make its platform services more accessible to small and medium-sized enterprises.

The Meituan Case (2021)

In October 2021, SAMR fined Meituan (China’s largest food delivery platform) RMB 3.442 billion (approximately USD 537 million) for similar exclusive dealing practices. SAMR found that Meituan had required restaurants to enter into exclusive agreements, imposed punitive measures including delisting and platform demotion on restaurants that listed on competing platforms, and used algorithmic monitoring to enforce exclusivity.

The Meituan case reinforced the enforcement framework established in the Alibaba case and demonstrated that SAMR was committed to addressing platform exclusivity across multiple sectors of the platform economy, not just e-commerce marketplaces.

Other Significant Platform Enforcement Actions

• Digital payment platforms (2022-2024): SAMR investigated the practices of major digital payment platforms regarding merchant exclusivity, bundling of payment services with other platform services, and data access restrictions. The investigations resulted in voluntary commitments to open merchant access and ensure data portability.
• Online travel platforms (2023): SAMR investigated online travel agencies for practices including “most-favored-nation” (MFN) pricing clauses that required hotels to offer their best available room rates on the platform, restricting price competition across platforms.
• App store and ecosystem practices (2024): SAMR has increasingly focused on the competitive impact of mobile app store policies, including mandatory use of the app store’s payment system (in-app purchase commission requirements), restrictions on alternative app distribution channels, and data access limitations for third-party developers.

Algorithmic Collusion and Hub-and-Spoke Arrangements

One of the most innovative aspects of China’s platform economy enforcement is its focus on algorithmic collusion. The Platform Guidelines and subsequent guidance from SAMR address several scenarios:

• Algorithmic price fixing: Platforms that use common pricing algorithms or share pricing data through a third-party algorithm provider may be found to have engaged in tacit algorithmic collusion, even in the absence of an explicit agreement. SAMR has signaled that it will examine the design and operation of pricing algorithms to determine whether they facilitate coordination.
• Algorithmic hub-and-spoke: Where a dominant platform provides pricing algorithms, data analytics, or revenue management tools to its merchants that result in aligned pricing across merchants, this may be analyzed as a hub-and-spoke monopoly agreement under Article 17 of the AML. The platform acts as the “hub” facilitating the horizontal coordination of merchant pricing.
• Self-preferencing algorithms: Platforms that design their search, ranking, and recommendation algorithms to favor their own products or services over those of third-party sellers on the same platform are subject to abuse of dominance scrutiny under Article 22.
• Transparency requirements: The Platform Guidelines require platforms to disclose the key parameters of their algorithmic ranking and recommendation systems to merchants and consumers, to prevent algorithmic manipulation that distorts competition.

Merger Control in the Platform Economy

China’s merger control framework has been adapted to address specific concerns in the platform economy. The 2022 AML amendments and the Platform Guidelines introduced several important changes:

• Low-threshold notification for platform M&A: Even where a transaction does not meet the standard turnover thresholds for mandatory merger notification, SAMR may require notification if the target has a high valuation, innovative technology, or significant data assets, and the transaction involves a dominant platform. This addresses the “killer acquisition” concern where dominant platforms acquire nascent competitors below standard notification thresholds.
• Conditional approvals: SAMR has imposed structural and behavioral remedies in several platform M&A approvals, including data separation requirements, interoperability commitments, and prohibitions on self-preferencing.
• Prohibition of anti-competitive concentrations: SAMR has the authority to prohibit or require divestiture of platform M&A transactions that would significantly impede competition, even if the transaction has already been consummated without notification.
• Review of minority shareholdings: SAMR has indicated that it will review minority equity investments in competing platforms or platform-adjacent businesses for their potential to facilitate anticompetitive coordination or entrench market power.

Special Regulatory Regime: The Antitrust Compliance Guide for Platform Firms

In addition to the AML framework, platform companies operating in China are subject to a sector-specific antitrust compliance regime introduced in 2021 and reinforced by SAMR and the Ministry of Industry and Information Technology (MIIT). Key requirements include:

• Mandatory compliance officer: Large platform companies must appoint a dedicated antitrust compliance officer at the vice-president level or above, responsible for developing and implementing compliance programs, conducting risk assessments, and reporting to SAMR.
• Annual compliance reporting: Platform firms must submit annual antitrust compliance reports to SAMR, detailing their market positions, competitive practices, and steps taken to ensure compliance with the AML and Platform Guidelines.
• Prohibition on data monopolization: Platforms are prohibited from using data they collect through their platforms to unfairly compete with merchants or to create barriers to data portability that lock users into the platform ecosystem.
• Interoperability requirements: SAMR has signaled that dominant platforms may be required to make their services interoperable with competing platforms to reduce switching costs and enable multi-homing by users and merchants.

Practical Compliance Recommendations for Digital Platform Companies

1. Conduct a comprehensive antitrust risk audit. Platform companies should audit their practices across all areas of the AML, including: (a) vertical restrictions in platform terms of service (exclusivity, MFN clauses); (b) abuse of dominance (self-preferencing, data monopolization, refusal to deal); (c) algorithmic pricing and coordination risks; (d) M&A strategy (including below-threshold transactions); and (e) compliance with sector-specific requirements.
2. Design algorithms with competition law in mind. Pricing, ranking, and recommendation algorithms should be designed and audited to minimize the risk of facilitating collusion, discriminating against competitors without objective justification, or manipulating market outcomes.
3. Establish data governance frameworks. Platform companies should implement data governance policies that ensure data access and portability rights, prevent data misuse for anti-competitive purposes, and comply with SAMR’s data-related requirements.
4. Implement multi-homing friendly policies. Rather than requiring exclusivity, platforms should consider allowing merchants and users to maintain relationships with multiple platforms, reducing the risk of exclusive dealing findings.
5. Monitor regulatory and enforcement developments. The platform economy enforcement landscape in China continues to evolve rapidly. Companies should designate personnel to track SAMR decisions, policy announcements, and legislative developments that may affect their platform operations.
6. Engage proactively with SAMR. For novel business models or potentially borderline practices, proactive engagement with SAMR through formal consultation mechanisms or informal guidance can reduce enforcement risk.

Conclusion

China’s AML applies to digital platform companies with full force and vigor. The regulatory framework — anchored by the Platform Guidelines, the historic Alibaba and Meituan decisions, and ongoing enforcement across multiple platform sectors — establishes that platform companies are not exempt from competition law simply because they operate digital business models with novel features. The application of the AML to platforms incorporates a sophisticated understanding of platform-specific competitive dynamics, including multi-sided markets, network effects, data-driven advantages, and algorithmic coordination risks. Foreign platform companies operating in China must navigate this complex and rapidly evolving regulatory landscape with robust compliance programs, proactive engagement with regulators, and a commitment to fair competition in the platform ecosystem. The stakes are high: as the Alibaba case demonstrates, penalties can reach into the billions of yuan, and the reputational and operational consequences of an AML violation can be severe.