China fines major e-commerce platforms $526M over 'ghost shop' violations

The penalties, amounting to 3.597 billion yuan, were announced by the State Administration for Market Regulation, which also confiscated what it described as “illegal” gains.

The companies fined include 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), according to the Global Times.

Regulators said the platforms were involved in “ghost delivery” practices as well as food safety violations.

Authorities ordered all seven companies to remove “ghost shops” that had not undergone proper review and to terminate partnerships with order-transfer platforms linked to such operations.

In addition, new food vendor listings -- particularly in categories prone to misuse such as dessert and takeaway outlets -- have been suspended for three to nine months.