Competition Law in Courier Route Optimization Software — China

1. Introduction

Courier route optimization software uses algorithms, GPS/location data, historical delivery information, traffic data, vehicle capacity, delivery windows, driver availability, and customer information to determine which courier should handle which parcel, in what sequence, and along which route.

In China, competition-law issues arise when such software is:

• supplied by an independent software provider;
• embedded into a courier company's platform;
• controlled by a dominant courier or logistics platform;
• used to allocate routes or orders among competing couriers;
• used to discriminate against rival logistics providers;
• used to lock couriers into a particular ecosystem;
• used to coordinate prices or market conduct; or
• used to restrict access to essential logistics data or APIs.

The principal legal framework is the Anti-Monopoly Law of the People's Republic of China (AML), supplemented by the Anti-Monopoly Guidelines for the Platform Economy, the Anti-Unfair Competition Law, and rules concerning algorithmic and platform governance.

2. Why Route Optimization Software Creates Competition-Law Risks

A route-optimization system may perform several commercially important functions simultaneously:

1. Route allocation — assigning parcels to particular drivers.
2. Order allocation — determining which courier receives an order.
3. Price optimisation — influencing delivery prices or freight rates.
4. Capacity allocation — deciding which vehicles receive high-value or time-sensitive shipments.
5. Performance scoring — ranking drivers and courier companies.
6. Data collection — accumulating information concerning delivery density, costs and customer behaviour.
7. Interoperability control — determining which third-party systems can connect to the software.
8. Market access — controlling whether rival courier operators can participate in the logistics network.

Consequently, the same algorithm can be both a legitimate efficiency tool and a potential mechanism for exclusionary conduct.

3. Relevant Chinese Competition-Law Provisions

A. Article 17 — Abuse of Dominant Market Position

Where the software operator or the courier platform has a dominant position, Article 17 of the AML becomes particularly important.

Potential abuses include:

• unfairly high or low prices;
• refusal to deal;
• exclusive dealing;
• tying or bundled sales;
• discriminatory treatment;
• imposing unreasonable trading conditions; and
• other exclusionary or exploitative conduct.

For route optimization software, the most relevant theories are generally:

refusal to deal + discriminatory treatment + exclusive dealing + unreasonable conditions + tying.

B. Article 18 — Determination of Dominance

The assessment may consider:

• market share;
• ability to control the relevant market;
• financial and technological strength;
• dependence of other undertakings;
• barriers to entry;
• network effects;
• switching costs; and
• other relevant factors.

In digital logistics markets, market share alone may not adequately capture market power because data, network effects and technological dependence can be important.

The Supreme People's Court's reasoning in Qihoo v Tencent is particularly relevant to this point.

4. Relevant Market

Several alternative relevant markets may arise.

Possible Product Markets

Depending upon the facts, the market could be:

• courier route-optimization software;
• logistics-management software;
• last-mile delivery optimization;
• courier dispatch software;
• integrated logistics platforms;
• fleet-management software; or
• broader logistics technology services.

A court or regulator would not automatically accept the narrowest definition.

For example, in Shenzhen Weiyuanma v Tencent, the Supreme People's Court-related jurisprudence emphasized that the relevant product market should correspond to the particular service affected by the alleged conduct rather than automatically treating the entire platform as the market.

Geographic Market

The market could potentially be:

• China-wide;
• provincial;
• city-specific; or
• another geographic area,

depending on licensing, network infrastructure, data requirements, customer demand and competitive conditions.

5. Algorithmic Route Allocation

Suppose a dominant courier platform operates software that systematically allocates the most profitable delivery routes to its own affiliated courier subsidiary while giving independent couriers less profitable routes.

This can create a competition-law problem if:

1. the platform possesses dominance;
2. the algorithm discriminates between similarly situated operators;
3. the discrimination lacks objective justification; and
4. the conduct excludes or disadvantages competing courier operators.

The algorithm does not escape competition-law scrutiny merely because the discriminatory decision is automated.

6. Self-Preferencing

A vertically integrated logistics group might operate:

Route Software → Courier Marketplace → Courier Fleet

The platform could configure its optimization software to:

• give affiliated couriers priority;
• assign competitors longer routes;
• reserve premium delivery windows for affiliates;
• provide competitors with inferior route information;
• reduce competitors' access to high-density delivery zones; or
• manipulate estimated delivery times.

This can raise concerns analogous to platform self-preferencing.

The critical question is whether the conduct protects legitimate technological efficiency or instead uses market power in one layer to restrict competition in another.

7. Data as a Competitive Asset

Route optimization requires enormous quantities of data.

Examples include:

• GPS data;
• historical delivery times;
• traffic patterns;
• customer density;
• failed-delivery statistics;
• driver performance;
• parcel volumes;
• delivery costs;
• warehouse locations;
• route profitability; and
• demand forecasts.

A dominant platform could potentially use this information to disadvantage competing courier companies.

The Alibaba/SF Express dispute illustrates the importance of logistics data and interoperability. In 2017, Cainiao and SF Express became involved in a dispute concerning logistics information and data interfaces. Although the dispute was not a final judicial finding of an AML violation against a dominant route-optimization provider, it demonstrates why data access and interoperability can become competition-sensitive issues in Chinese logistics markets.

8. Refusal to Provide API Access

Suppose a dominant route-optimization platform provides its API to its affiliated courier but refuses access to independent courier companies.

Competition-law analysis would examine:

• whether the platform is dominant;
• whether the API is technically or commercially indispensable;
• whether alternative systems exist;
• whether interoperability is reasonably feasible;
• whether refusal forecloses downstream competitors;
• whether legitimate cybersecurity or privacy reasons exist; and
• whether the refusal substantially restricts competition.

An outright refusal is therefore not automatically unlawful; its competitive effects and justification matter.

9. Exclusive Dealing

A route-optimization provider might require courier companies to agree:

"A courier using this software may not use competing route-optimization systems."

If imposed by a dominant undertaking, this could raise Article 17 concerns concerning exclusive dealing.

The analysis would consider:

• duration;
• market coverage;
• switching costs;
• availability of alternatives;
• rebates or penalties;
• percentage of customers tied up;
• network effects; and
• foreclosure of competing software providers.

10. Tying

Consider a dominant logistics platform that says:

"Access to our courier marketplace is available only if the courier purchases our route-optimization software."

This creates a possible tying theory.

The two products must be meaningfully distinguishable, and the conduct must be capable of restricting competition in the tied market.

The reasoning in Qihoo 360 v Tencent is especially relevant because the case examined allegations involving bundling and tying in software markets.

11. Algorithmic Pricing and Route Optimization

Route optimization can overlap with pricing.

For example, an algorithm may simultaneously determine:

• delivery route;
• courier allocation;
• delivery fee;
• surge price;
• driver compensation; and
• priority ranking.

If competing courier companies use the same algorithm or exchange competitively sensitive information through a common platform, there is a potential risk of facilitated coordination.

The relevant questions include:

• Who controls the algorithm?
• What data does it receive?
• Does it receive competitors' prices?
• Does it recommend or automatically impose prices?
• Can competitors independently determine prices?
• Is the algorithm transparent about pricing inputs?
• Does it punish deviations from algorithmically generated prices?

12. Six Important Chinese Cases and Their Relevance

Case 1 — Lalamove (Huolala) Antitrust Compliance Rectification, 2026

Regulator: State Administration for Market Regulation (SAMR)

This is currently one of the most directly relevant developments for algorithmic logistics.

SAMR required Lalamove to rectify practices involving:

• algorithmic suppression of freight rates;
• platform rules concerning exclusive vehicle stickers;
• excessive platform deductions;
• restrictions affecting drivers; and
• aspects of its pricing and matching mechanisms.

The 2026 rectification required more transparent and reasonable use of pricing algorithms and greater disclosure concerning price changes.

Relevance

This demonstrates that Chinese competition authorities are willing to examine algorithmic conduct in logistics platforms, rather than treating algorithmic decisions as technologically neutral.

For route-optimization software, it suggests that an algorithm may attract competition scrutiny where it affects:

• courier remuneration;
• freight prices;
• order allocation;
• route allocation; or
• platform access.

Case 2 — Alibaba "Choose One" Case, 2021

Authority: SAMR
Undertaking: Alibaba Group

SAMR found that Alibaba had abused its dominant position in China's online retail platform services market by requiring merchants to choose between Alibaba and competing platforms.

The enforcement decision found that Alibaba used:

• platform rules;
• data;
• algorithms;
• rewards; and
• penalties

to reinforce the exclusivity arrangement.

Relevance to Route Software

This is highly relevant where a logistics platform says:

"If you use our route-optimization system, you cannot use competing courier networks."

The Alibaba case demonstrates that platform rules and algorithms can be part of the mechanism implementing an exclusionary strategy.

The fact that an exclusionary restriction is technologically implemented does not make it immune from the AML.

Case 3 — Meituan Exclusive-Dealing Case, 2021

Authority: SAMR
Undertaking: Meituan

SAMR investigated Meituan's use of exclusive arrangements involving merchants on its platform and concluded that the conduct constituted abuse of dominant market position.

The case concerned restrictions on merchants dealing with competing platforms.

Relevance

The case provides an important analogy for courier software.

Suppose a dominant logistics platform tells courier companies:

"You may use our optimization software only if you exclusively process deliveries through our platform."

The competitive concern would be similar: software access becomes a mechanism for restricting multi-homing.

Case 4 — Qihoo 360 v Tencent, Supreme People's Court

Parties: Qihoo 360 and Tencent
Issue: Abuse of dominant position and tying in software markets

Qihoo alleged that Tencent abused its market position through conduct involving QQ and related software products.

The Supreme People's Court emphasized the importance of carefully identifying the relevant market and assessing actual competitive effects.

The case also involved allegations of tying/bundling.

Relevance

This is important for courier optimization software because:

• software markets may have rapid technological change;
• multiple products may be integrated;
• free or subsidized software complicates traditional price-based market definition;
• technological ecosystems may create network effects; and
• bundling must be examined in its competitive context.

The case also demonstrates that a claimant cannot establish dominance merely by defining the market artificially narrowly.

Case 5 — Shenzhen Weiyuanma Software Development Co. v Tencent

Issue: Abuse of dominant market position involving the WeChat platform

The plaintiff operated commercial accounts through WeChat and alleged abuse of market dominance after Tencent restricted those accounts.

The court focused on the specific service affected by the alleged conduct and identified the relevant market as online promotion/publicity services rather than simply treating the entire WeChat ecosystem as the relevant market.

Relevance

For courier optimization software, the relevant market should similarly be connected to the actual competitive problem.

For example:

A dispute concerning route-optimization APIs should not automatically be analyzed as though the relevant market were the entire "logistics industry."

The analysis could instead focus on:

route-optimization software → dispatch software → last-mile optimization services

depending upon substitution possibilities.

Case 6 — Alibaba/Cainiao and SF Express Data-Interoperability Dispute

Parties: Cainiao/Alibaba and SF Express
Issue: Logistics data and platform interoperability

The 2017 dispute concerned the exchange and use of logistics information between Alibaba's Cainiao network and SF Express.

The dispute demonstrated the strategic importance of logistics data and interoperability in China's platform economy.

Relevance

A similar dispute today could involve:

• route data;
• parcel-tracking information;
• API access;
• delivery-time information;
• warehouse information;
• GPS information; and
• customer delivery data.

Where a dominant platform uses control over such data to disadvantage competing logistics operators, competition-law issues can arise.

13. Comparative Case Table

14. Algorithmic Discrimination

Route optimization software may discriminate between courier companies.

For example:

Such differentiation is not automatically unlawful.

There may be legitimate explanations, such as:

• vehicle capacity;
• geographic proximity;
• delivery reliability;
• traffic conditions;
• service-level obligations;
• customer preferences; or
• specialized equipment.

The competition issue becomes stronger where the differential treatment is not objectively justified and has exclusionary effects.

15. Predatory or Below-Cost Pricing Through Algorithms

A dominant logistics platform could potentially use an algorithm to:

1. reduce delivery prices;
2. subsidize selected routes;
3. impose losses on independent courier networks;
4. increase prices after competitors exit.

This can create concerns regarding predatory pricing or exclusionary pricing.

A regulator would need to examine:

• relevant costs;
• duration;
• intent/economic rationale;
• ability to recoup losses;
• competitor exclusion;
• consumer effects; and
• efficiencies.

The Lalamove 2026 regulatory action makes algorithmic pricing in China's logistics sector particularly significant.

16. Common Algorithmic Collusion Risk

Suppose five competing courier companies use a common optimization provider.

The provider receives:

• Company A's prices;
• Company B's prices;
• Company C's capacity;
• Company D's delivery volumes; and
• Company E's route margins.

If the software uses that information to coordinate recommendations across competitors, it can create a serious competition concern.

The distinction is between:

Legitimate optimization

"Find the shortest route based on traffic."

and

Potentially problematic coordination

"Adjust each courier's prices based on competitors' confidential pricing information so that prices remain aligned."

The second situation requires substantially greater competition-law scrutiny.

17. Hub-and-Spoke Risk

A route-optimization software provider can potentially become a hub connecting competing courier companies.

The structure could be:

Courier A
↓
Common Algorithm Provider
↑
Courier B

If the common software provider facilitates coordination among competitors, the platform may become a mechanism through which otherwise independent undertakings coordinate competitively sensitive conduct.

Potentially sensitive information includes:

• prices;
• discounts;
• route margins;
• capacity;
• customer allocation;
• delivery volumes;
• future pricing;
• geographic expansion plans.

18. Refusal to Interoperate

A dominant route-optimization platform might refuse to allow competing courier companies to connect their:

• warehouse systems;
• GPS systems;
• fleet-management software;
• customer platforms;
• payment systems; or
• parcel-tracking databases.

The refusal should be examined through an effects-based framework.

Important questions include:

1. Is the platform dominant?
2. Is the interface technically indispensable?
3. Are alternatives available?
4. Would interoperability be reasonably feasible?
5. Is refusal capable of excluding rivals?
6. Is there a legitimate security justification?
7. Would interoperability undermine cybersecurity?
8. Would access damage privacy or data protection?

19. Cybersecurity and Privacy as Legitimate Justifications

A software operator should not automatically be required to provide unlimited access.

It may have legitimate reasons to restrict access involving:

• cybersecurity;
• customer privacy;
• trade secrets;
• system integrity;
• fraud prevention;
• data localization;
• operational safety.

Therefore, competition law should distinguish:

legitimate technical protection

from

pretextual exclusion of competitors.

20. Intellectual Property and Route Algorithms

Route optimization software may involve valuable:

• source code;
• machine-learning models;
• algorithms;
• databases;
• patents;
• APIs;
• technical documentation.

Ownership of intellectual property does not automatically provide unlimited freedom to exclude competitors.

Competition analysis may arise where IP rights are combined with:

• dominance;
• refusal to license;
• tying;
• exclusionary interoperability restrictions;
• discriminatory licensing; or
• strategic foreclosure.

21. Anti-Unfair Competition Law

Not every harmful algorithmic practice will necessarily constitute an AML violation.

The Anti-Unfair Competition Law can also become relevant, particularly where conduct involves:

• interference with another platform;
• technological disruption;
• unauthorized use of data;
• manipulation of platform operations;
• circumvention of technical restrictions; or
• unfair exploitation of another undertaking's technological resources.

This distinction is increasingly important as Chinese courts address technology-driven competition disputes.

22. Evidence in Algorithmic Cases

Competition authorities and courts may need to examine:

• source-code architecture;
• algorithmic parameters;
• model-training data;
• API documentation;
• logs;
• pricing records;
• route-allocation records;
• A/B tests;
• internal emails;
• developer instructions;
• contractual restrictions;
• system audit trails;
• complaints from courier companies; and
• before-and-after market data.

Algorithmic cases therefore create substantial digital-evidence and technical-evidence issues.

23. Compliance Measures for Courier Platforms

A Chinese courier platform using route-optimization software should consider:

1. Algorithm audit

Regularly test whether the algorithm systematically disadvantages particular competitors.

2. Competition-sensitive data controls

Prevent unnecessary sharing of one courier's confidential information with another.

3. API neutrality

Establish objective technical criteria for API access.

4. Non-discrimination

Document legitimate reasons for differential route allocation.

5. Multi-homing

Avoid unjustified contractual restrictions preventing courier companies from using competing systems.

6. Pricing controls

Separate legitimate route optimization from competitor-sensitive pricing coordination.

7. Human review

Create escalation mechanisms for algorithmic decisions affecting market access.

8. Record keeping

Maintain documentation explaining:

• algorithm objectives;
• inputs;
• changes;
• testing;
• business justifications; and
• compliance reviews.

24. Hypothetical Example

Assume ChinaRoute Ltd. operates the dominant courier-routing platform in a major Chinese city.

It controls 70% of commercial route-optimization software used by local courier companies.

Its algorithm:

• gives its affiliated courier 60% of premium routes;
• gives rival couriers longer routes;
• provides competitors with slower API access;
• requires exclusive use of ChinaRoute software;
• uses competitors' confidential delivery-price data; and
• automatically adjusts recommended prices based on that data.

Competition-law issues

Issue 1 — Dominance:
Whether ChinaRoute possesses a dominant position.

Issue 2 — Discrimination:
Whether preferential route allocation disadvantages competing courier operators.

Issue 3 — Exclusive dealing:
Whether mandatory exclusive software use forecloses competing optimization providers.

Issue 4 — API refusal:
Whether discriminatory API access restricts competing courier networks.

Issue 5 — Data:
Whether confidential competitor data is being improperly exploited.

Issue 6 — Algorithmic coordination:
Whether the common algorithm facilitates coordination between otherwise independent courier companies.

Issue 7 — Tying:
Whether access to the courier marketplace is unlawfully conditioned upon purchase/use of ChinaRoute's software.

25. Economic Effects That Matter

A Chinese competition analysis should examine both negative and positive effects.

Potentially harmful effects

• exclusion of rival software providers;
• reduced innovation;
• increased switching costs;
• reduced courier choice;
• higher delivery prices;
• suppression of courier remuneration;
• foreclosure of competing logistics networks;
• discriminatory allocation;
• reduced interoperability.

Potential efficiencies

Route optimization can simultaneously produce substantial efficiencies:

• shorter delivery distances;
• reduced fuel consumption;
• lower delivery costs;
• reduced congestion;
• faster parcel delivery;
• better vehicle utilization;
• lower emissions;
• improved reliability;
• reduced failed deliveries.

Therefore, the existence of an algorithm does not itself establish an antitrust violation.

26. Key Legal Principle

The central competition-law question is not:

"Is an algorithm being used?"

It is:

"How is market power being exercised through the algorithm, and what effect does that conduct have on competition?"

This distinction is particularly important after China's increasing regulatory attention to algorithms in platform and logistics markets.

27. Conclusion

Courier route optimization software occupies an increasingly important position at the intersection of competition law, platform regulation, data governance and algorithmic decision-making in China.

The principal risks concern:

1. algorithmic discrimination;
2. self-preferencing;
3. exclusive dealing;
4. tying and bundling;
5. API and interoperability restrictions;
6. data access and data exploitation;
7. algorithmic pricing;
8. facilitated coordination;
9. foreclosure of competing courier networks; and
10. unfair technological interference.

The 2026 Lalamove/SAMR developments are particularly significant because they show direct regulatory attention to algorithms within China's logistics sector. The Alibaba, Meituan, Qihoo v Tencent and Weiyuanma cases provide additional principles concerning platform dominance, exclusivity, software ecosystems and relevant-market definition.

Accordingly, a courier route-optimization system should be treated not merely as a technical logistics tool but, where it affects market access, pricing, allocation or competitor interoperability, as a potential competition-law instrument requiring algorithmic competition compliance.