Cover Story: Tightening the Rule Book to Make China’s Internet Platforms Fairer

China's internet platform economy is experiencing increased regulatory scrutiny aimed at fostering orderly competition, enhancing algorithm transparency, and balancing dynamics between suppliers, users, and platforms. This regulatory shift emphasizes setting rules to prevent price wars, clarify refund policies, and protect platform workers from exploitation [para. 1][para. 2][para. 3][para. 5]. Premier Li Qiang, during a State Council executive meeting, outlined priorities for fair business practices and improved labor roles on November 22, 2024 [para. 3][para. 4][para. 5]. Associate Professor Chen Tianhao highlighted the importance of these measures in stabilizing employment and boosting domestic demand [para. 6].

The platform economy remains integral to China, with 1.1 billion internet users and an 80% internet penetration rate as of mid-2024. Key sectors like e-commerce and food delivery are driving significant growth [para. 7]. Over the years, China has shifted from strict antitrust measures to promoting moderated growth, urging platforms to enhance economic development, job creation, and competitiveness [para. 8]. Nonetheless, the slowing economic growth prompted intensified regulatory measures, including the "Clean Algorithm" initiative targeting harmful practices [para. 9][para. 10].

Platforms are adopting various changes in response to these regulations, such as revising refund policies and implementing worker protections. Platforms like Meituan and ele.me are taking measures to prevent worker exhaustion, while video platforms are improving algorithm transparency [para. 11]. The government now seeks a governance model that balances oversight with platform-driven ecosystem management, ensuring service quality and sustainable growth [para. 12].

Internet content platforms face scrutiny over algorithm-induced addiction and information silos, posing societal risks by reducing content diversity and fostering addiction [para. 18]. As a response, regulators have banned addictive algorithms and demanded content transparency, compelling platforms to allow users to manage interest tags and disable personalized recommendations [para. 18][para. 19]. Platforms like Douyin and Kuaishou are making algorithm changes to diversify content and mitigate biases [para. 20][para. 21].

China's content platforms must also tackle misinformation and harmful content, affecting public trust. Platforms like Douyin and Kuaishou face challenges adhering to regulatory requirements while managing operational limitations [para. 23][para. 24]. Cyberbullying remains a complex issue, with platforms collaborating with legal entities to provide support to victims, although most reported incidents do not meet legal thresholds [para. 25].

The gig economy in China faces challenges regarding labor protections, with platforms like Meituan and Didi under pressure to address worker fatigue and safety [para. 31]. Meituan has implemented breaks and rest periods to counter worker exhaustion, while Didi enforces a minimum rest requirement. However, earnings for gig workers have been declining, resulting in poorer services [para. 32][para. 33][para. 34]. Experts emphasize the need for structural reforms to ensure worker rights, citing the inadequacy of current labor laws for the gig economy [para. 39].

Price discrimination based on user profiles has raised concerns about fairness in China's platform economy. Despite regulatory efforts to increase transparency, effective solutions remain elusive, with platforms often resisting disclosing algorithmic mechanisms [para. 40][para. 41][para. 43]. Activists have called for independent audits to ensure fairness [para. 44]. Meanwhile, platforms are dealing with slowing e-commerce growth amid fierce competition and oversupply, prompting regulatory calls to reform aggressive pricing and refund policies [para. 48][para. 49][para. 53][para. 54]. Efforts are underway to balance consumer and merchant rights through improved refund assessments and merchant protections [para. 56][para. 57].