“Big data swindling,” or (大数据杀熟), also sometimes translated “big data backstabbing,” is a form of algorithmic discrimination by which the prices for the same goods and services online are hiked up for existing customers. This form of data-enabled price discrimination has been widely practiced in China in recent years by online shopping platforms, food delivery services, taxi and ride-hailing services, flight and hotel booking platforms and so on.
“Big data swindling” essentially involves the differentiation of charges to customers by the seller based on the use of personal information and data analytics – an algorithm-fueled application of the old and familiar commercial concept of price discrimination. Using big data, platforms determine the absolute maximum prices consumers are willing to pay for goods and services, and thereby maximize revenue. Translated literally, the term means essentially “[using] big data [to] kill existing [consumers].” The implication is that internet companies, through apps and other platforms, are using data obtained from consumers – regarding their financial status, shopping habits and history, and so on – to exploit them, charging a premium whenever and wherever possible.
Though data-enabled price discrimination has been practiced for many years already, including on e-commerce sites such as Amazon outside China, the term “big data swindling” first became more widely recognized in China in 2018, as an increasing number of companies sectioned consumers using their personal information and data analytics. At the end of 2018, the term was listed among the year’s top-ten popular new terms.
As the term was more broadly discussed in 2018, with users sharing through social media their experiences with “big data swindling,” a number of Party-state media addressed the issue. In early 2018, China Youth Daily, a newspaper published by the Chinese Communist Youth League (CCYL), published the results of a survey of 2,008 people in which 51.3 percent claimed to have been “[big data] swindled.” The China Youth Daily survey was also mentioned in a commentary by Xinhua Daily (新华日报), a paper published by the CCP Committee of Jiangsu province, which said that while big data was not to blame for the phenomenon of “big data swindling” (as “technology is neutral”), the “information gap” between internet firms and consumers as a result of the “black box quality” of algorithms put the latter at a distinct disadvantage.
Similarly, the Guangming Daily, a newspaper published by the Central Propaganda Department, suggested that while price discrimination could be a legitimate practice – noting, for example, that customers could pay 30 yuan to purchase a can of coke in a five-star hotel that might sell for 2 yuan out on the street – “big data swindling” was slightly different in nature, as there was a fundamental lack of transparency about normal pricing. Furthermore, the paper said, the practice of “big data swindling” might have a “’reputational impact’ on the future development of big data.”
In a March 2018 report, Nanfang Daily, the official mouthpiece of the CCP Committee in Guangdong province, quoted one expert on “big data swindling” as saying that big data was a “double-edged sword,” that it could be “used well to better serve consumers and improve user experience,” but at the same time might be used to deceive consumers and maximize corporate benefit at their expense.
From 2018 onward, momentum was building in China for greater action against the use of big data to differentiate charges among consumers for like goods and services. In March 2019, the Beijing Consumers Association released a study based on more than 3,000 questionnaires that showed that 88.3 percent of respondents believed “big data swindling” was an extremely common occurrence, and 56.92 percent said they had personally experienced the practice. Among the association’s recommendations at the time for dealing with the problem of “big data swindling” was the establishment of a unified association for the use of internet big data (互联网大数据应用协会), which would help to “achieve internal supervision of enterprises and to accept supervision by social groups.”
Concern over the practice of “big data swindling” continued to develop through 2019 and 2020. Attention with focused again on the issue in December 2020, as an online personality known as by the handle “Drifting Priest” (漂流神父) posted an article to social media about one of China’s largest shopping and delivery platforms, Meituan. The article, “I Was Swindled by Meituan“ (我被美团会员割了韭菜), alleged that the delivery platform charged existing customers higher delivery fees than it charged new customers. The revelations in the article drew anger from many Chinese online. “The size of China’s Internet is not at all proportional to the social responsibility it bears,” one user commented under Drifting Priest’s article.
On March 2021, China Central Television ran a report about investigating the practice of “big data swindling” on various different platforms, including Meituan, Ele.me and Didi. In April 2021, The Paper (澎湃) reported that the local government in Guangzhou had held an administrative meeting to address “big data swindling,” with the goal of strengthening regulation of big data use in online markets, and safeguarding the rights and interests of consumers. During the meeting, 10 major internet enterprises, including Meituan, signed a pledge against differential treatment of consumers and the illegal collection of consumers’ personal information.
Finally, in August 2021, the practice of “big data swindling” was subjected to new restrictions as China’s government introduced the Personal Information Protection Law of the People’s Republic of China, which specified in Article 24 that those “making use of personal information shall ensure transparency in decision-making and fair and just results, and shall not apply unreasonable differential treatment to individuals in terms of transaction prices and other transaction conditions.” The new law effectively prohibits data-enabled price discrimination against existing customers.
The government moves against “big data swindling” in 2021 are part of a broader effort in China to crack down on internet companies in regard to privacy, data management, antitrust, and other issues.