Seven food platforms penalized 3.6b yuan

China's top market regulator fined seven major e-commerce and food delivery platforms a combined total of 3.59 billion yuan ($530 million) on Friday for violations related to "ghost kitchen" operations, in one of the country's largest penalties regarding online food safety.

Ghost kitchens are unqualified food preparation facilities that produce meals exclusively for delivery and have no dine-in seating for customers.

The State Administration for Market Regulation announced that it had penalized Pinduoduo, Meituan, JD, Alibaba-backed delivery service Ele.me, short video platform Douyin, as well as Taobao and Tmall, for failing to properly vet food vendors operating on their platforms.

The fines and confiscations totaled 3.597 billion yuan, and an additional 19.69 million yuan in personal fines was levied on the seven companies' legal representatives and food safety executives for failing to fully discharge their management responsibilities.

The administration found that the platforms did not adequately verify the business licenses of online food merchants, thus failing to meet their legal obligation to perform qualification checks, which led to problems with ghost kitchens.

The companies entered into cooperation agreements with third-party order-routing intermediaries and failed to take the necessary measures despite knowing that such practices could harm consumer rights.

The SAMR said the penalties were imposed under China's food safety and e-commerce laws.

In addition to ordering the companies to rectify their conduct, the regulator suspended the onboarding of new cake and dessert vendors on the platforms for periods ranging from three to nine months.

Following the launch of the investigation, the administration said that all seven platforms had removed unverified ghost kitchen vendors and halted cooperation with third-party order-routing platforms involved in the violations.

chengyu@chinadaily.com.cn