Chinese regulators have issued new rules to curb e-commerce platforms’ use of consumer data to charge different prices for the same goods or services, targeting a long-criticized practice in which loyal or high-spending users were often quoted higher prices than others.

The measures, announced Jan. 7 by multiple government agencies, tighten oversight of algorithmic pricing and data profiling, marking the clearest move yet to draw a regulatory line between “big data” price discrimination and lawful promotions after years of consumer complaints and court cases. 

Under the new rules, platforms are prohibited from using data profiling to offer different prices to different users, and barred from practices that restrict consumer rights or shift liability without notice.

For years, loyal or high-spending users of platforms ranging from travel apps to social media shops have complained that they are often quoted higher prices than others, prompting some to experiment with ways to “game” opaque pricing algorithms — from switching devices to masking browsing behavior.

Regulatory scrutiny intensified after a landmark court ruling in 2021 in eastern China’s Zhejiang province. 

In that case, the court ruled in favor of a consumer surnamed Hu in a lawsuit against online travel giant Trip.com. Hu had booked a deluxe lake-view room at a Hilton hotel through Trip.com in July 2020 for nearly 2,900 yuan ($415). Upon checkout, she discovered the room’s listed price on her invoice was just under 1,400 yuan — meaning she had paid more than double, despite being a long-term, high-tier Trip.com user.

The court ordered Trip.com to refund the price difference and pay Hu a total of nearly 4,800 yuan. The ruling is often cited as the first judicial recognition in China of big-data-based price discrimination against customers.

Gaming the system

Long before the new rules, many Chinese users attempted to counter opaque pricing systems on their own. Online posts and social media guides advised tactics such as switching devices, clearing cookies, or limiting app usage in hopes of avoiding unfavorable pricing triggered by what users dubbed “big data discrimination.” 

In a popular post on Xiaohongshu, Guo Ru, a product manager at a major internet company, said she’d spent years as an “accomplice to an evil algorithm,” and wanted to be a “good person.”

Guo began sharing ways to game algorithms on her popular Xiaohongshu, or RedNote, account, suggesting using low-end Android phones to search and pay for online purchases, or keeping phrases like “the fare is too expensive; I’d rather not go” copied to one’s clipboard in hopes of triggering lower prices.

“In most cases, big data-driven price discrimination doesn’t work by directly changing prices, but by recommending products that align with a user’s perceived price tolerance. As users interact with platforms more frequently and more data accumulates, these profiles become increasingly precise,” Guo told Sixth Tone.

Others have turned to anonymity. On Xiaohongshu, a group of users with identical pink dinosaur avatars who call themselves the “momo army” aim to weaken algorithmic judgment by regularly clearing cookies, browsing in incognito mode, or reducing app usage to escape constant profiling.

Still, Guo cautioned that such tactics have clear limits. Airfares, she noted, are often set by airlines rather than e-commerce platforms, while likes or comments on unrelated platforms usually have minimal impact.

“From a user’s perspective, the most effective way to avoid big-data-driven price discrimination is to rely on targeted searches and recommendations from people you trust,” Guo said.

Authorities have begun pressing platforms to respond. On the day the new measures were announced, the Shanghai Municipal Cyberspace Administration convened more than 20 major Chinese social media and e-commerce platforms on improving the transparency of online algorithms. 

Several platforms — including Dewu and Pinduoduo — later announced measures aimed at reducing price discrimination.

Domestic media outlet Tide News said in a commentary that clearer and more operational criteria are needed to draw the line between unlawful big-data-driven price discrimination and legitimate promotional strategies. At the same time, regulators must strengthen their own oversight of pricing practices by using big data and artificial intelligence.

Guo told Sixth Tone she believes overt price double standards will now largely disappear, as practices like charging different prices for the same item are easily documented with screenshots, making such visible violations too risky for major platforms.

Still, Guo cautioned that “the methods could become more covert.” Instead of direct price discrimination against loyal users, she believes, platforms may shift to differentiated coupon distribution. “The listed price will stay the same, but new users will get large coupons, while existing users will receive smaller ones,” she added.

Public reaction to the new measures has been swift. Discussion of the new policy drew millions of views on microblogging platform Weibo. Users voiced comments such as “this (new policy) is a way of covertly admitting that big data-profiling was indeed happening,” and “it’s important to regulate (platform’s) base algorithms.”

Editor: Marianne Gunnarsson.

(Header image: SEAN GLADWELL/Getty Creative/VCG)