China’s eCommerce regulator issued draft guidelines for fees that e-commerce marketplaces can charge third-party merchants, saying that online platform should charge reasonable fees while taking into consideration factors like operating costs for the merchants they do business with.
The regulator is calling on platforms to:
- Set flexible pricing strategies that adhere to principles of fairness, legality, and good faith for charges like commission, membership, and service fees.
- Clearly publicize their fee structures, honor commitments to fee reductions, and avoid unfair practices like duplicate charging or billing without delivering services.
- Establish dedicated compliance teams and internal mechanisms to identify and prevent unreasonable charges.
- Provide better support to smaller businesses, especially during challenging periods such as natural disasters or public health emergencies.
These proposed regulations are part of a broader effort by Chinese authorities to support local merchants amid economic challenges and to address concerns over non-transparent and complex fee structures on e-commerce platforms. Companies such as Alibaba, JD.com, and PDD Holdings, which operate major online marketplaces, are expected to be impacted by these changes.
Companies have until June 3rd to provide feedback on the draft guidance.
Should US implement similar rules? Or would that be considered over-regulation?
In my opinion, the best way to encourage marketplaces to reduce their fees and provide support to sellers is to introduce COMPETITION into the space. That's where having strong and enforced antitrust regulation can really help shape an industry.