(Bloomberg) -- Chinese regulators have summoned seven of the country's largest internet companies, including travel giants Ctrip and Meituan, ordering them to halt automated ticket-grabbing practices that officials say threaten the stability of the national railway booking system. The move represents a significant expansion of Beijing's multi-year campaign to rein in the power of its domestic tech sector.
The Cyberspace Administration of China (CAC) and the National Railway Administration said in a joint statement that the platforms were not to use automated programs for “large-scale, high-frequency” ticket grabbing. The regulators cited the country's Cybersecurity Law and regulations on protecting critical information infrastructure as the legal basis for the summons.
The seven companies called to the meeting were Ctrip, Tongcheng, Qunar, Fliggy, Meituan, Zhixing Train Ticket, and Gaotie Guanjia. These third-party platforms have long offered users “accelerated” booking services for a fee, using bots to flood the official 12306 railway platform with ticket requests, especially during peak travel seasons like the Lunar New Year.
This intervention strikes at a key revenue and user acquisition tool for the online travel agencies (OTAs). While providing convenience for some travelers, the practice creates an unfair advantage and has been a source of public complaints for years. The regulatory action is expected to harm the competitive positioning of these firms and signals a continued tightening of oversight for China's internet giants.
The order to cease these operations is the latest in a series of regulatory actions targeting China's sprawling internet industry. Beijing has been increasingly concerned with issues of data security, monopolistic behavior, and the disorderly expansion of capital. The explicit invocation of the Cybersecurity Law underscores the government's view of the 12306 platform as “critical information infrastructure” that must be protected from interference.
For the affected companies, the impact could be substantial. Automated ticket-grabbing services are often bundled with other products or sold as premium add-ons, contributing directly to revenue. More importantly, they serve as a powerful tool to attract and retain users on their platforms, which could now see a decline in traffic as the playing field is leveled with the official state-run booking channel.
This article is for informational purposes only and does not constitute investment advice.
