Pinduoduo, Meituan, JD.com, Ele.me, Douyin, Taobao, and Tmall Fined 3.597 Billion Yuan
On April 17th, the State Administration for Market Regulation imposed administrative penalties on 7 e-commerce platforms in a series of "ghost restaurant" cases, ordering them to rectify their illegal acts, suspend the addition of new cake shops for 3 to 9 months, and pay a total of 3.597 billion yuan in fines and confiscations. Additionally, the legal representatives and food safety directors of the 7 platforms were collectively fined 19.6874 million yuan.
According to the State Administration for Market Regulation, in accordance with Article 131 of the "People's Republic of China Food Safety Law" and Article 83 of the "People's Republic of China E-Commerce Law," penalties were imposed on Shanghai Xunmeng Information Technology Co., Ltd. (Pinduoduo), Beijing Sankuai Technology Co., Ltd. (Meituan), Beijing Jingdong Sanbailiudu E-Commerce Co., Ltd. (JD.com), Shanghai Lazas Information Technology Co., Ltd. (formerly Ele.me, now Taobao Flash Sale), Beijing Douyin Technology Co., Ltd. (Douyin), Zhejiang Taobao Network Co., Ltd. (Taobao), and Zhejiang Tmall Network Co., Ltd. (Tmall). In accordance with Article 75 of the "Implementation Regulations of the People's Republic of China Food Safety Law," penalties were also imposed on the legal representatives and food safety directors of the 7 platforms.
Investigations revealed that the above 7 e-commerce platforms were lax in their review of food business licenses for merchants entering the platform and failed to fulfill their qualification review obligations in accordance with the law. They signed cooperation agreements with order-transfer platforms, knowingly or should have known that the order-transfer behavior infringed upon the legitimate rights and interests of consumers, but failed to take necessary measures. The legal representatives and food safety directors of the 7 e-commerce platforms bear responsibility for food safety management but failed to fully perform their relevant job duties. These actions seriously violated the relevant provisions of the "People's Republic of China Food Safety Law," the "People's Republic of China E-Commerce Law," and the "Implementation Regulations of the People's Republic of China Food Safety Law."
After the investigation was launched, the State Administration for Market Regulation immediately urged the e-commerce platforms to make immediate corrections. All 7 platforms have removed the relevant "ghost restaurants" that had not been reviewed and stopped cooperating with related order-transfer platforms for restaurant order transfers.