Screenshot of State Administration for Market Regulation

China's top market regulator said Friday that it has imposed a total fine of 3.597 billion yuan ($526million) on seven major e-commerce platforms for their involvement in a string of food delivery "ghost shop" cases and food safety violations, the Xinhua News Agency reported.

China's State Administration for Market Regulation (SAMR) announced on Friday that it has imposed administrative penalties on seven e-commerce platforms including PDD, Meituan, JD.com, Ele.me, ByteDance's Douyin, Alibaba's Taobao and Tmall.com 3.597 billion yuan for involvement in "ghost delivery" violations involving food

The market regulator also suspended new cake shop listings on these platforms for three to nine months, and imposing a total of 3.597 billion yuan in fines and confiscated illegal gains. Additionally, the legal representatives and food safety directors of the seven platforms were fined a combined total of 19.6874 million yuan, according to Xinhua.

According to the SAMR's statement, administrative penalties were imposed on seven e-commerce platforms — Shanghai Xunmeng Information Technology Co (PDD), Beijing Sankuai Technology Co, (Meituan), Beijing Jingdong 360 Degree E-commerce Co (JD.com), Shanghai Lazhas Information Technology Co (formerly Ele.me, now Taobao Flash Purchase), Beijing Douyin Technology Co (Douyin), Zhejiang Taobao Network Co (Taobao), and Zhejiang Tmall Network Co (Tmall) — in accordance with the country's food safety law and e-commerce law.

Investigations revealed that the seven e-commerce platforms failed to strictly review food business operator licenses for merchants accessing their platforms and failed to fulfill their statutory obligations to examine qualifications, the SAMR said, adding that these platforms signed cooperation agreements with order-transfer platforms, knowing or should have known that order-transfer practices infringed upon consumers' legitimate rights and interests, yet failed to take necessary measures. 

The legal representatives and food safety directors of the seven platform enterprises, who bear responsibility for food safety management, failed to fully perform their relevant duties. These actions seriously violated the relevant provisions of Chinese laws, the SAMR siadsaid in its statement.

The SAMR ordered all seven platforms to remove the relevant "ghost shops" that had not undergone proper review and terminate their catering order-transfer partnerships with related order-transfer platforms.

Global Times