A landmark penalty has been imposed on Trip.com Group Limited (TCOM), with the State Administration for Market Regulation issuing a record fine of 5.179 billion yuan, comprising 1.658 billion yuan in illegal gains and a 3.521 billion yuan penalty. This penalty rate of 7.5% surpasses previous records, eclipsing the 4% fine levied on Alibaba and the 3% fine on Meituan.
The core issue is not the traditional "choose one from two" exclusivity clause. Instead, it involves a more subtle, technologically-driven, and difficult-to-evidence system of traffic control. Trip.com has categorised hotels into tiers, using algorithms to replace contracts and traffic as leverage, coercing hotel owners into waiving their right to operate across multiple platforms. This represents a shift from traditional monopoly to a technology-era monopoly, prompting a heavier regulatory response.
Monopoly's New Packaging
Unlike the explicit "choose one from two" practices of Alibaba and Meituan, Trip.com has built a hidden control system based on traffic allocation. Partner hotels are divided into three tiers: Exclusive Partner, Gold Partner, and Unbranded. Exclusive Partners receive the most traffic and benefits in exchange for exclusive cooperation. Gold Partners must guarantee the lowest price across all platforms—20 yuan lower or 5% less. Unbranded partners receive almost no traffic support.
The sophistication of this "tiered system" lies in its unwritten nature. Exclusivity requirements are never in contracts but are communicated orally by business managers. If a hotel lists on another platform or fails to meet pricing standards, Trip.com penalises it with downgrades and traffic restrictions. One hotel reported being downgraded from Gold to Unbranded three to five times, each time facing a 15 to 30-day traffic penalty period. The oral, undocumented, and adjustable nature of this system makes legal challenges extremely difficult for hotel owners.
This system's harm extends beyond individual hotels. By locking high-quality hotel resources to a single platform, it raises market entry barriers for competitors. A legal expert noted that this case marks a key step in regulating platform traffic monopolies in China. The manipulation of traffic allocation through big data and AI, using traffic as a condition for merchants to accept unfavourable terms, is now clearly considered illegal. The escalating fine percentages—4% for Alibaba in 2020, 3% for Meituan in 2021, and 7.5% for Trip.com in 2026—show a trend of increasingly strict regulatory oversight. Trip.com may not be the worst offender, but it was perhaps the most ingenious, using technology to disguise monopolistic behaviour as a platform service.
How Algorithms Become Price Control Tools
While the traffic tier system is a form of "soft control," Trip.com's "Price Adjustment Assistant" is a "hard tactic" that strips merchants of pricing power. Marketed as a tool to help merchants adjust prices and increase revenue, in practice, it functions solely as a "price-cutting assistant." It automatically scans competitor prices via a backend system and forces hotel room prices down without merchant consent.
A hotel in Shaanxi reported the assistant adjusting prices over ten times in a single day. An industry association representative cited a case where a hotel in Jiangsu complained that Trip.com forcibly enabled the Price Adjustment Assistant nine times without authorisation; turning it off was ineffective. The hotel's holiday room price of 480 yuan was reduced to 130 yuan. Repeated attempts to contact Trip.com were unsuccessful, and the hotel was ultimately fined for rejecting orders. A more insidious method of increasing commissions was also reported. When the same room type was sold for 100 yuan on Meituan and 98 yuan on Trip.com, and it failed to meet the requirement of being 5% lower (95 yuan), Trip.com deducted 3 yuan from the hotel directly.
A legal expert argued that the "lowest price across the web" guarantee, while appearing beneficial to consumers, actually harms them. It prevents merchants from offering lower prices on other platforms, and the forced price cut on Trip.com can lead merchants to raise prices elsewhere to compensate for lost profits. Some merchants may also reduce service quality, resulting in "low price, low quality" or even "low price, inferior quality" service for consumers. Another legal expert stated that technology cannot be a shield for monopolistic behaviour. The severe penalty for Trip.com's use of technology to commit illegal acts indicates that the complexity of technology will not create a regulatory blind spot. In March 2026, Trip.com announced the removal of the Price Adjustment Assistant function. However, many hotel operators reported that despite the tool being removed, business managers still provide pricing advice during visits, suggesting that to get more traffic and exposure, room prices must be lower than those of nearby competitors. The tool is gone, but the logic remains.
The 5.179 Billion Yuan Fine: A Shift for the Industry?
Financially, Trip.com can absorb this fine. In 2025, the company reported net revenue of 62.4 billion yuan and net profit attributable to shareholders of 33.3 billion yuan. However, this profit included 19.9 billion yuan in investment gains (mainly from selling MakeMyTrip shares), meaning core profit was about 13.4 billion yuan. The fine represents 38.6% of core profit and 8.3% of total revenue. As of the end of 2025, Trip.com had 45.451 billion yuan in cash and restricted cash, with total cash and cash equivalents of 104 billion yuan, allowing it to absorb the fine without increasing debt.
The impact goes beyond the one-time charge. In the first quarter of 2026, Trip.com's revenue grew 17% year-over-year to 16.2 billion yuan, but net profit plummeted 41.57% to 2.5 billion yuan. The company's guidance for the second quarter is cautious, forecasting net revenue growth of only 3% to 8%, a significant slowdown from the first quarter's 17%. Accommodation booking is Trip.com's core profit engine, generating 26.1 billion yuan in revenue in 2025 (42% of total revenue) with a gross margin of 75% to 80%. The antitrust penalty directly targets this high-margin business. Following Meituan's precedent, its monetisation rate dropped from about 12% to 10%, and core commerce revenue growth slowed by about 4 percentage points. If Trip.com experiences a similar decline in its monetisation rate, the impact on revenue growth will be long-term.
The fine also creates potential for industry shifts. The Trip.com group (Trip.com + Qunar + Tongcheng-Elong) holds about 61% of China's online hotel and travel market, with Trip.com's main site accounting for about 42%. Meituan's hotel and travel business holds about 22%, and Fliggy holds about 11%. If Trip.com's exclusivity clauses are removed, Meituan can more easily access high-end hotel inventory, and Fliggy and small hotel SaaS providers will also benefit indirectly. Consumers may not see lower hotel prices in the short term. However, in the long run, when hotels regain the right to operate across platforms and set their own prices, and when market competition returns from "traffic control" to "service quality," the industry's health will truly improve.
The Limits of a Good Company
Financially, Trip.com is undoubtedly a good company. In 2025, it had revenue of 62.4 billion yuan, over 20 consecutive quarters of profitability, 45% growth in its international business, and a 90% increase in inbound travel bookings. In the online travel sector, it has achieved what others have not. However, a good company is not necessarily a good platform. When a platform controls over 58% of the market and can dictate the traffic lifeline for millions of hotels across the country, using algorithms to replace contracts and technology to control prices, power becomes distorted. The tiered system and the forced Price Adjustment Assistant are essentially using technology to enforce a monopoly.
The 5.179 billion yuan fine is not an endpoint but a starting point. It marks the shift in antitrust enforcement from "cracking down on obvious illegal acts" to "regulating technological monopolies." In the future, all platform companies must answer this question: when traffic becomes a bargaining chip for power, who will constrain the platform's own expansionary impulses? Trip.com has removed the Price Adjustment Assistant, but the logic of traffic tiering remains. It has promised to rectify, but how will the "oral communication" transaction rules be regulated? These questions cannot be answered by the 5.179 billion yuan fine.
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