On July 25th, the State Administration for Market Regulation (SAMR) issued a penalty decision that cast a dark shadow over Trip.com Group Limited (NASDAQ: TCOM), also listed as TRIP.COM-S (HK: 09961), totaling 5.179 billion yuan in fines and confiscations. It also ordered the refund of 122 million yuan in order reserves to hotel operators. This marks the first antitrust case in China's online travel industry and the first in the platform economy to simultaneously apply three penalties: confiscation of illegal gains, a hefty fine, and an order to refund funds.
Upon hearing the news, many analysts' initial reaction was to crunch the numbers: over 5 billion yuan seems like a temporary flesh wound for Trip.com Group Limited, which has an annual net profit exceeding 30 billion yuan, not a bone-deep injury. However, shifting focus from the income statement to the specific behaviors identified in the penalty decision reveals a much more complex issue. The regulator did not penalize a single violation, but rather a comprehensive set of strategies used since 2020 to maintain a competitive advantage: skewed traffic distribution, exclusive partnership agreements, mandatory "lowest price on the entire network" policies, direct price adjustment authority, and traffic-limiting punitive mechanisms. These are precisely the core methods Trip.com Group Limited used in recent years to cement its dominance in the hotel booking market and sustain high commission rates.
In other words, the fine is a visible, explicit loss. What truly needs re-evaluation is whether this business model, which underpins high gross margins and competitive barriers, can continue to function. The penalty isn't just about the money; it's about an entire competitive logic.
Many people's first impression of this penalty is the "5.179 billion yuan" figure, but it actually comprises three parts. The administrative fine itself is 3.521 billion yuan, calculated at 7.5% of Trip.com Group Limited's 2025 domestic sales revenue of 46.958 billion yuan. An additional 1.658 billion yuan represents the confiscation of illegal gains—income the regulator determined Trip.com Group Limited obtained through monopolistic practices. Finally, 122 million yuan must be refunded to hotels as order reserves. The total amount involved exceeds 5.3 billion yuan.
Where to Begin
The first category targets the exclusive cooperation requirements for "special brand" hotels. Trip.com Group Limited used traffic incentives and support rights as bait to persuade high-transaction-volume, well-reviewed hotels to join its "special brand" system, on the condition that they wouldn't cooperate with competing platforms. For hotels, this presented a stark choice: reject the exclusivity and see traffic and orders plummet, or accept it and hand over the key to their online distribution to a single platform.
The second category is more insidious, involving the mandatory "lowest price on the entire network" policy for "golden" and "non-branded" hotels. Trip.com Group Limited required hotels operating across multiple platforms to offer the lowest price on its own platform, granting itself the right to adjust prices directly. If a hotel was found selling cheaper elsewhere, Trip.com Group Limited could use tools like "Price Adjustment Assistant" or "Listing Pass" to lower the price further. It could also penalize merchants by deducting order reserves or reducing traffic exposure.
Over the past few years, the hotel industry's complaints about Trip.com Group Limited have been constant. Many small and medium-sized hotel operators have reported increasingly high commission rates and promotional fees, yet they struggle to survive without the platform. The Yunnan Provincial Tourism and Lodging Industry Association noted that relevant platform commissions have risen from 8%-10% a few years ago to 12%-18%. Combined with promotional costs, total platform expenses for some operators can reach 40% of their revenue.
This penalty effectively brings these long-standing, unspoken rules into the open. More critically, the regulator demands not just payment but comprehensive rectification. Exclusive partnerships must end, mandatory lowest-price policies are forbidden, and direct price adjustments and traffic-limiting punishments must cease. This is like dismantling the key bricks Trip.com Group Limited used to build its competitive barriers, one by one.
As of July 27th, no publicly available broker research reports have systematically adjusted Trip.com Group Limited's earnings forecasts following the penalty. However, the core issue the market needs to reassess is not the 5.179 billion yuan's impact on current profits, but whether future commission and promotion rates will come under pressure. When the platform can no longer bind merchants with exclusivity clauses or control pricing through the lowest-price mechanism, merchant bargaining power may recover, capping the upward potential for commission and promotion rates. For a company with long-term gross margins around 80%, changes in fee rates could have a more significant impact on long-term profits than a one-time fine.
Behind the Moat Lies a Shift in Pricing Power
The 2025 financial report shows Trip.com Group Limited's full-year net revenue was 62.409 billion yuan, with net profit attributable to shareholders of 33.294 billion yuan. This net profit includes 19.9 billion yuan in investment gains, while the group's operating profit was 15.773 billion yuan, an operating margin of about 25%. More striking are the gross margins: approximately 81.3% in 2024 and about 80.6% in 2025. This level places it in the top tier of the entire internet industry, even surpassing many so-called "profiteering" industries.
Accommodation booking is the cornerstone of Trip.com Group Limited's profitability. Public industry data shows that commissions for leading OTA platforms typically range from 12% to 18%, varying by hotel grade, cooperation type, and promotional investment. This is just the visible commission. There are also various promotional tool fees: "Pyramid" pay-per-click, "Ladder" commission-boosting tools, and "Competition Circle" traffic interception products. These costs push merchants' total channel expenses even higher.
The penalty decision states that based on online hotel booking platform transaction volume, Trip.com Group Limited's relevant market share was 58.3% in 2024 and 58.7% in 2025. By revenue, it was 58.5% and 56.8%, respectively. In the broader domestic OTA market, BOCOM International estimated 2024 GMV shares at approximately 56% for Trip.com Group Limited, 15% for Tongcheng, 13% for Meituan, 8% for Fliggy, and 3% for Douyin. It is important to note that Qunar is consolidated into Trip.com Group Limited's financials, while Tongcheng Travel is an independent listed company. Therefore, Qunar and Tongcheng cannot be simply added together to calculate a "Trip.com Group" market share.
The "lowest price on the entire network" policy is a prime example. On the surface, requiring merchants to offer the platform the lowest price is intended to benefit consumers. However, when a single platform holds over half the market share, its "lowest price requirement" essentially restricts merchants' independent pricing power. Merchants cannot offer lower prices or adjust pricing strategies on other platforms, effectively locking the entire industry's price system. Now that the regulator demands rectification, pricing power will gradually return to merchants.
It is foreseeable that price differences between hotels across various platforms will increase, merchants will have more room for independent promotions, and price wars between platforms may reignite. For Trip.com Group Limited, this means the price advantage previously secured by rules will be weakened. To maintain market share, it may need to invest more in subsidies or enhance service capabilities—both of which will erode profit margins.
The Essence of the 'Price Discrimination' Controversy
The antitrust penalty primarily targets the relationship between the platform and merchants, the B-side issue. However, Mr. Lin's recent high-profile ticket refund incident has also thrust the C-side consumer trust issue into the spotlight. Mr. Lin, a Black Diamond member of Trip.com Group Limited, spent 15,217 yuan on July 3rd to book a July 16th flight from Beijing to New York to watch the World Cup. When his plans changed on July 13th, he applied for a refund three days before departure, only to receive just 432 yuan back—374 yuan in taxes and fees and 58 yuan in service charges. The ticket price of over 14,000 yuan was completely non-refundable.
Mr. Lin recalled that the product he purchased was prominently displayed in search results, with the phrase "only partial taxes and fees are refundable" printed in tiny font next to the price. Scrolling down a few lines, another ticket for the same route, only about 400 yuan more expensive, had much more flexible refund and change conditions. This means critical information determining the user's potential loss was not given the same prominence as the price.
The base commission for airline ticket agency business is typically low. The platform's greater monetization opportunity lies in information display and product bundling: placing restrictive, low-price tickets at the top and flexible ones further down; showing different sorting logic to different users; and using packages, insurance, and airport transfers to increase average transaction values. These practices are not directly equivalent to "price discrimination," but they all exploit information asymmetry—users have limited time and won't browse every option, assuming the top-ranked choices are the most suitable.
Antitrust regulation targets B-side market competition, while consumer rights protection focuses on C-side information fairness. The simultaneous occurrence of these two events is no coincidence. When a platform holds enough market power, it has both the incentive and the ability to optimize its revenue model—squeezing upstream suppliers with high commissions and employing information stratification downstream to boost conversions. These practices make business sense and are reflected in impressive financial reports, but pushing them too far inevitably triggers regulatory and public backlash.
Conclusion
The 5.179 billion yuan fine marks the end of one phase and the beginning of another. For Trip.com Group Limited, the one-time financial loss is actually the easiest to absorb. The real tests lie ahead: Will hotel business commission rates decline after the rectification of exclusive partnerships and lowest-price mechanisms? Will market share loosen? Can high gross margins be sustained? None of these questions can be answered by short-term earnings reports, but each is critical to the company's long-term valuation logic.
Interestingly, James Liang once said that Trip.com Group Limited couldn't see any competitors even with a telescope. But it seems competitors may not be just ahead; they might also be on the other side of the rules. When competition becomes fair again, all players on the track will start running, and the ultimate beneficiaries will be the entire industry and every ordinary consumer.
Massive information, precise interpretation, all in the Sina Finance APP. Editor: Sun Tonghuai.
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