China fines seven e-commerce platforms 3.597 billion yuan over "ghost stores"

Beijing (ANTARA) - China’s top market regulator on Friday fined seven e-commerce trading platforms a total of 3.597 billion yuan (approximately 524 million USD) for involvement in a series of “ghost store” cases related to food delivery and food safety violations.

The State Administration for Market Regulation (SAMR) in a statement said the administrative penalties were imposed on Pinduoduo, Meituan, JD.com, Ele.me (now renamed Taobao Flash Sale), Douyin, Taobao, and Tmall in accordance with China’s food safety and e-commerce laws.

SAMR stated that the applications were ordered to rectify their actions and suspend the addition of new food outlets for periods ranging from three to nine months.

Additionally, legal representatives and food safety officials from the seven companies were collectively fined 19.6874 million yuan for failing to fully carry out their duties in food safety management.

SAMR conveyed that the investigation found these companies failed to strictly review the licences of food sellers operating on their platforms, thereby violating their legal obligations to verify sellers’ qualifications.

The applications also entered cooperation agreements with order transfer platforms, despite knowing or should have known that such actions could harm consumers’ legitimate rights and interests, the market regulator said.

SAMR revealed that since the investigation began, it immediately instructed the platforms to make prompt rectifications, and all have removed unauthorised “ghost stores” and ceased cooperation with related order transfer platforms.