Trip.com is back in the "cage"

On July 25, the State Administration for Market Regulation imposed administrative penalties on Trip.com Group for its monopolistic conduct of abusing its dominant market position in accordance with the law.

The total amount of fines and confiscations reaches 5.179 billion yuan, consisting of 1.658 billion yuan of confiscated illegal gains and a 3.521 billion yuan fine calculated at 7.5% of Trip.com's domestic sales revenue in China of 46.958 billion yuan in 2025. Meanwhile, the platform is ordered to refund 122 million yuan of order reserve funds that were forcibly deducted from hotel operators.

The regulatory penalties for Trip.com's violations are based on two points: first, inducing "Special Brand" hotels to enter exclusive partnerships through traffic tilting; second, forcing Gold Brand and unbranded hotels to offer the lowest prices across all platforms, with non-compliance resulting in traffic restriction, brand delisting, and reserve fund deduction.

Judging purely from the amount, the total penalty imposed on Trip.com this time falls between the penalties for Alibaba and Meituan. However, the 7.5% fine ratio indicates that Trip.com's violations have reached a deep and serious stage. Whether it is exclusive partnerships, the lowest-price guarantee across all platforms, or price adjustment assistants, the essence lies in the fact that Trip.com is leveraging its dominant position to directly intervene in, manipulate, and even determine the operating rules of merchants, meddling in the operational links of hotel businesses.

Coase once proposed in "The Nature of the Firm": Why do firms exist? His answer was that firms can replace market transactions with internal organizational commands to save transaction costs.

One of the purposes of saving transaction costs is to improve efficiency. Over the past years, in order to enhance efficiency and achieve better economic benefits, the authorities have often transferred partial de facto powers in different industries, bringing enterprise entities to the center of the stage to assist all parties in achieving efficiency improvements.

Including the early days of online travel platforms, part of the market organizational functions was undoubtedly transferred to the platforms, including matchmaking between entities, ranking, credit evaluation, performance guarantee, initial dispute adjudication, etc. The essence is to use the platform to help all participants in the industry form a virtuous cycle of the ecosystem and promote a more acceptable efficiency improvement.

However, as platforms gradually grew larger and the Matthew effect took shape, leading platforms used their dominant positions to break this ecological balance — the platforms that were originally entrusted to make market matchmaking smoother began to stare into the abyss, seizing all the punitive power and final interpretation power that did not belong to them.

The essence of Trip.com's penalty this time is that it has privatized part of the public functions entrusted by the authorities to serve the company's continuous and in-depth profit-seeking.

In a sub-list of the 2026 Fortune China 500, among the 40 companies with the highest net profit margins, Trip.com ranks second with a net profit margin exceeding 50% — this calculation includes investment income, but it is sufficient for a serious review of Trip.com's profit richness.

It is understandable that companies are established for profit, but the means to achieve profits must be constrained. If the powers transferred by all parties to the platform are unilaterally digested for self-interest, the distribution of traffic and benefits will change from an efficiency tool to private property. The traffic aggregated by millions of merchants and the huge potential benefits will become a sharp weapon for the platform to "support its own forces to defy control".

In fact, looking back over a longer timeline, Trip.com was not like this in its early days.

Over the past two decades, in a highly fragmented industry with a low online penetration rate, Trip.com has solved many industry pain points such as mismatched product descriptions, unstable performance, and poor after-sales service. It has also turned hundreds of thousands of hotels in the industry into standardized products that consumers can book with one click. In recent years, it has improved the user travel peripheral ecosystem through SOP process construction, filling the gaps in the industry's infrastructure, which also makes it difficult for competitors to effectively divert its traffic for a time.

During this process, Tongcheng and Tuniu were invested in, while Qunar and eLong were merged into the Trip.com system. Although industry concentration has gradually increased, everything was once acquiesced: the gradually growing platform once saved communication, price comparison, and accountability costs for all parties, showing an overall positive and controllable trend.

However, how to make increasingly powerful platforms truly achieve self-restraint and ensure that the transferred powers are constrained internally may be an eternal challenge.

In terms of GMV, in China's online hotel booking platform service market, Trip.com's market shares from 2020 to 2025 are 53.5%, 54.0%, 53.3%, 59.1%, 58.3%, and 58.7% respectively; in terms of operating revenue, its shares in the same period are 53.4%, 51.5%, 51.1%, 58.9%, 58.5%, and 56.8% respectively.

Under such an obvious industry advantage, hotels hardly have the qualification to claim that they can operate without Trip.com. The cost of doing so is almost equivalent to exiting the mainstream online entry. Especially in areas where high-star hotels have a high ADR and Trip.com's BD coverage is more matched, the platform's control over key supply is even stronger.

More critically, the operational tools originally designed by the platform to promote efficiency improvement have gradually changed their nature over time, essentially transforming into a means of suppression to achieve a greater dominant position.

In the past, if a powerful enterprise wanted to infiltrate and control the upstream and downstream industrial chains, it usually needed to make capital investments. However, today, the platform economy no longer requires direct capital participation. Relying solely on traffic distribution, platforms can indirectly control the fate of merchants and exert a profound impact on their actual operations.

In fact, both this penalty and previous reports on Trip.com have repeatedly pointed out that the platform's methods such as Special Brand, Gold Brand, lowest price across all platforms, price adjustment assistant, brand listing access, and order reserve fund are exactly an evolution of the above-mentioned control.

The essence lies in the platform's deep overstepping of its authority — beyond its due scope of achieving efficiency and matchmaking, the platform is more like a disguised governance authority that has "legislative" provisions, inspection methods, and enforcement power for fines and confiscations.

Although the platform deducts merchants' reserve funds and restricts their traffic, the result of restricting merchants has objectively taken shape. In this regard, compared with the "choosing one from two" behavior of platforms in previous anti-monopoly cases, where merchants at least had more or less choices, Trip.com's case has gone a step further, with a stronger and more concealed span of behavioral overstepping.

Therefore, what is more worthy of vigilance than Trip.com's penalty this time is that once a dominant platform begins to abuse and indirectly privatize the transferred powers, and even transforms from an athlete into a referee, this more concealed and advanced "misconduct" is becoming increasingly difficult to govern.

This may also explain the record-high 7.5% fine ratio imposed on Trip.com this time.

In the process of power transfer, once the power to formulate competition rules, the disguised coercive power over market entities, and the final adjudication power after disputes are involved, the difficulty and complexity of the game will increase sharply. At this time, how to make the company that has obtained the transferred powers realize the boundaries it must abide by is never an easy question to answer.

In fact, before the State Administration for Market Regulation officially penalized Trip.com this time, regulatory authorities in many regions such as Guizhou and Zhengzhou had also summoned the platform for talks. On the consumer side, this penalty does not involve disputes such as big data-enabled price discrimination against existing customers and tied sales. Most of these issues fall under the jurisdiction of consumer rights protection, pricing, and e-commerce regulatory departments, and are not included in the case of abuse of dominant position this time.

For this reason, it may not be realistic to improve the experience of all parties in the OTA industry solely through an anti-monopoly fine. This is destined to be a long process of game.

For Trip.com, a fine of over 5 billion yuan can hardly fundamentally shake the company's dominant position, as it still possesses the strongest supply organization capability in China's tourism industry. A single fine cannot change the company's industry status, but it can draw a clear scope of activities that the company must abide by.

At present, the online penetration rate of the tourism industry has reached a relatively high level, and the bargaining power brought by exclusive supply and lowest-price locking has been denied by regulators. From a business perspective alone, what Trip.com needs to compete with other competitors in the future is hard power such as service quality, supply chain depth, and international performance capabilities. Compared with the previous model, earning this kind of "hard-earned money" will not be easy.

From another perspective, nothing is absolute. To a certain extent, as an industry leader, the ecological construction of the industry itself is equivalent to the company's own health. This may also be the true meaning of this penalty: the pioneer who was entrusted to light the lamp for all parties should not decide who is qualified to see the light.

This article is from the WeChat official account "Yinxing Finance" (ID: yinxingcj), author: Xiao Feng, and is republished by 36Kr with authorization.