On July 25th, the State Administration for Market Regulation (hereinafter referred to as the "State Administration for Market Regulation") imposed administrative penalties on Ctrip Group Co., Ltd. (09961.HK, hereinafter referred to as "Ctrip") for abusing its market dominance and implementing monopolistic behavior in accordance with the law, with a total fine of 5.179 billion yuan.

The 5.179 billion yuan consists of three parts: the State Administration for Market Regulation ordered Ctrip to fully refund the 122 million yuan of reserve funds for hotel operators that were forcibly deducted; Confiscate illegal gains of 1.658 billion yuan; Impose a fine of 7.5% of its 2025 domestic sales revenue in China, totaling RMB 3.521 billion.

Since January 2026, the State Administration for Market Regulation has launched an investigation into Ctrip in accordance with the Anti Monopoly Law of the People's Republic of China (hereinafter referred to as the "Anti Monopoly Law") and established a special task force. After investigation, it was found that since 2020, Ctrip has abused its dominant position in the online hotel booking platform service market in China, with traffic distribution mechanism as the core, and implemented two monopolistic behaviors using platform rules and technological means:

One is to require "special brand" hotel operators to carry out exclusive cooperation, with incentives such as providing the highest traffic tilt and equity support, inducing hotel operators with high transaction volume, good service quality, and strong user attraction to choose "special brand", and requiring them not to cooperate with competitive platforms. 'Special brand' refers to the level of management that Ctrip classifies merchants based on indicators such as hotel cooperation and sales volume. Different levels correspond to different traffic distribution and platform service rights.

The second is to force "gold medal" and "unlicensed" hotel operators to offer the "lowest price on the entire network", requiring hotel operators operating across platforms to have the lowest prices on the Ctrip platform, and allowing them to directly adjust prices. If it is found that hotel prices are higher than those on competitive platforms, Ctrip will use technical tools and manual means such as "price adjustment assistant" and "listing platform" to lower prices. At the same time, Ctrip uses technological means to monitor the exclusive cooperation of hotel operators and the implementation of the "lowest price on the entire network", and implements punitive measures such as restricting traffic, "delisting", and deducting reserve funds for orders to ensure the implementation of the behavior.

The State Administration for Market Regulation stated that the above-mentioned actions of Ctrip have excluded and restricted market competition, restricted cross platform operations of hotel operators, infringed on the independent pricing rights of hotel operators, harmed consumer interests, intensified "internal competition" in the industry, hindered the healthy development of the industry, and constituted the abuse of market dominance prohibited by Article 22 (1) (4) and (5) of the Anti Monopoly Law without justifiable reasons for limiting transactions and attaching unreasonable transaction conditions.

In response to this, Ctrip stated that it will strictly comply with regulatory requirements, promote and systematically implement various rectification work item by item, and ensure that all measures are implemented properly.

The reporter learned from multiple hotel merchants that after being investigated by the State Administration for Market Regulation, Ctrip cancelled the "special brand" and "gold medal" logos of hotel merchants and removed the "price adjustment assistant" function.

Liu Xu, a special researcher at the National Institute for Strategic Studies at Tsinghua University, told reporters that in recent years, "internal competition" has been a long-standing problem in the wine and travel industry, and the profit margins of businesses have been continuously shrinking, putting pressure on service quality. As a leading platform in the industry, Ctrip has been punished this time. If it can rectify in accordance with the law, it will help promote the industry to shift from price competition to a healthy competition of quality and differentiation.

(Author Zheng Yuxin)