Price control and restricted choice: Trip.com was fined 5.179 billion yuan.

On July 25, the State Administration for Market Regulation imposed administrative penalties on Trip.com Group for its abuse of dominant market position, confiscating illegal gains of 1.658 billion yuan, issuing a fine of 3.521 billion yuan, with the total sum of confiscated funds and fines reaching 5.179 billion yuan, and ordering it to fully refund the 122 million yuan in mandatory deducted order reserves collected from hoteliers.

Half a year ago, when Trip.com was placed under investigation, we put forward a deduction that the problem of Trip.com might not lie in pricing, but in whether hoteliers still had the freedom to choose.

Now it seems that this judgment needs a single-word revision — the problem is not "not in pricing", but "not only in pricing".

The penalty decision confirms that Trip.com, leveraging its dominant position in China's online hotel booking platform service market, with the traffic allocation mechanism as the core, has committed two types of monopolistic conducts. On one hand, on the condition of maximum traffic tilt and benefit support, it required "Special Brand" hotels not to cooperate with competing platforms; on the other hand, it demanded "Gold Brand" and "No Brand" hotels to grant Trip.com the "lowest price across the entire network", and directly lowered hotel prices through technical tools such as "Price Adjustment Assistant", "AI Business Assistant", "Listing Connect", as well as manual operations.

The penalties in this case are not targeting Trip.com's excessive scale, nor are they prohibiting platforms from making profits, let alone requiring hotel prices to be maintained at a certain level. Instead, a platform with market dominance must not convert its mastered traffic, ranking and technical capabilities into transaction terms that hoteliers cannot refuse.

Locking in hotels on one hand, locking in prices on the other

Trip.com's two conducts have respectively controlled the two most critical competitive elements in the online hotel booking market.

The requirement for "Special Brand" hotels to engage in exclusive cooperation locks in high-quality supply.

Hotels with high transaction volume, excellent service quality and strong user appeal are core resources for all platforms to compete for consumers. When these hotels are required to hand over all their online room inventory to Trip.com for distribution, other platforms will lose not just a few room types, but the ability to attract consumers, expand traffic and continue to secure more hotel partners.

The requirement for "Gold Brand" and "No Brand" hotels to offer the lowest price across the entire network locks in price competition.

Other platforms could originally encourage hotels to provide lower prices on their platforms by reducing commissions, offering subsidies or innovating cooperation models. However, as long as Trip.com can synchronously lower prices, it will be extremely difficult for other platforms to gain a price advantage, or win consumers through better transaction terms.

Exclusive cooperation leaves other platforms without access to good hotels, while the lowest price across the entire network prevents other platforms from offering lower prices; the former blocks supply, and the latter suppresses competition. Both rules jointly make it increasingly difficult for competitors to impose effective constraints on Trip.com.

The real danger lies in a complete "rule machine"

Trip.com did not merely write a few requirements in cooperation agreements, but established a complete operating mechanism covering incentives, monitoring and penalties.

"Special Brand" hotels willing to enter exclusive partnerships can obtain more traffic, higher rankings and additional benefits; hotels that still operate across multiple platforms must ensure that Trip.com offers the lowest price; the platform then uses algorithms and technical tools to monitor whether hotels comply with the rules, and adopts measures against non-compliant parties including warnings, traffic restrictions, benefit revocation, brand delisting, and even deduction of order reserves.

The penalty decision shows that over 90% of "Special Brand" hotels have long-term and stably implemented the exclusive cooperation requirements, while the "Price Adjustment Assistant" has issues such as forced activation, activation without user awareness, difficult exit, and automatic reactivation after exit.

At this point, what hoteliers are facing is no longer an ordinary business suggestion, but a rule system that can distribute benefits, monitor behaviors and automatically enforce consequences.

Hotels may seem to retain the right to choose, but rejecting exclusive cooperation may lead to loss of traffic; refusing the lowest price requirement may result in direct price adjustment by the platform; failing to comply with platform requirements may lead to traffic restrictions, delisting or fund deductions.

When the cost of refusal becomes unbearably high, the "voluntariness" stated in the contract no longer equals free choice in the market.

The "lowest price across the entire network" does not necessarily benefit consumers

This penalty decision also puts forward a highly important judgment: consumer interests cannot be measured solely by immediate prices.

The "lowest price across the entire network" may seem to allow consumers to purchase at lower prices on Trip.com, but at the same time it prevents other platforms from forming price advantages through lower commissions and better terms, and may also force hotels to raise prices on other platforms. When hotel profits are squeezed for a long time, the quality of hotels, service standards and consumer experience will eventually be adversely affected.

Anti-monopoly protection does not aim to secure a few yuan off a single order, but to ensure that there are always market players capable of challenging existing platforms through lower costs, better services and innovative models.

Low prices formed without competition are unlikely to be sustainable; the lowest price obtained by restricting competition does not necessarily represent real benefits for consumers.

Shifting from reviewing contracts to examining algorithms and systems

This investigation not only reviewed cooperation agreements, but also extracted technical documents and algorithm codes, and carried out big data analysis and algorithm parsing.

This means that future platform anti-monopoly compliance can no longer only focus on whether sensitive terms such as "exclusivity", "lowest price" or "pick one from two" appear in contracts. It is also necessary to examine how the ranking system allocates traffic, how price adjustment tools operate, whether merchants can truly exit, and whether the platform uses technical means to turn seemingly mild terms in contracts into mandatory commands that must be executed in the system.

Algorithms are by no means a safe haven for platform responsibilities. When a platform writes rules into codes, it does not change the legal nature of the rules themselves; every traffic restriction, price adjustment and delisting automatically executed by the system remains a specific application of the platform's market power.

Zhichanli's Judgment

Trip.com can grow in scale, master advanced technologies, and win more hotel partners and consumers through better services. However, it cannot, just because it has become a critical market entry point, decide where high-quality hotels can operate, nor can it set different selling prices for hotels across different platforms.

Anti-monopoly regulation never opposes corporate success. Instead, it prevents corporate success from being solidified into rule-based power that other business operators cannot bypass, negotiate with or reject.

The Trip.com case ultimately answers the question we raised half a year ago: when hotels cannot freely choose their partners, independently determine their sales prices, and have to face algorithm monitoring, traffic restrictions and economic penalties, they may still be able to click "Agree" or "Exit". But that is no longer a real choice.

This article is from the WeChat Official Account "Zhichanli" (ID: zhichanli), authored by Shawn/MCP, and published by 36Kr with authorization.