China fines ecommerce giants $527m over food delivery lapses

China’s State Administration for Market Regulation fined seven ecommerce platforms more than 3.6 billion yuan (US$527.3 million).

The regulator ordered to rectify illegal activities after an investigation found they failed to properly verify food vendor licenses.

The platforms included Meituan, Taobao and Tmall, as well as JD.com and Pinduoduo, which allowed unverified “ghost kitchens” to operate.

🧠 Food for thought

Implications, context, and why it matters.

The penalty fits China’s wider effort to clamp down on “ghost kitchens” and other abuses in food delivery 1.
Regulators require ecommerce and food-delivery platforms to verify merchants through storefront photos plus kitchen checks. Merchants must also upload continuous, unedited videos of the facade, dining area, and kitchen with verifiable location data 1.
Online food vendors must use the same name as the physical storefront. Their main webpage must continuously display a business license, photos of the premises, and the real operating address 2.
The rules aim to stop delivery-only kitchens that use fake addresses or rented licenses. They also add a mandatory “no dine-in” label for delivery-only operators 2.

The fine marks a shift in oversight toward everyday operating rules, rather than only market dominance cases.
Earlier penalties hit companies such as Alibaba and Meituan over monopolistic conduct, including exclusivity deals called “pick one from two” 3.
Regulators are also probing business workflows plus labor practices. Guidance says delivery-time algorithms should assume an average electric-bike speed of 15 kilometres per hour or less 1.
Platforms now need pricier compliance built into core systems. That adds strain for Meituan, which already faced losses from newer bets such as grocery delivery and community group-buying, where neighbors place orders together to get lower prices 4.