On April 17, the State Administration for Market Regulation issued administrative penalties against seven e-commerce platforms, including Shanghai Xunmeng Information Technology Co., Ltd. (PDD Holdings Inc), Beijing Sankuai Technology Co., Ltd. (Meituan), Beijing Jingdong 360 E-Commerce Co., Ltd. (JD.com), Shanghai Lazasi Information Technology Co., Ltd. (formerly Ele.me, now Taobao Quick Buy), Beijing Douyin Technology Co., Ltd. (Douyin), Zhejiang Taobao Network Co., Ltd. (Taobao), and Zhejiang Tmall Network Co., Ltd. (Tmall), for a series of cases involving "ghost restaurants." The penalties were imposed in accordance with Article 131 of the Food Safety Law of the People's Republic of China and Article 83 of the E-Commerce Law of the People's Republic of China. The seven platforms were ordered to rectify their illegal activities, suspend new cake shop registrations for periods ranging from three to nine months, and pay total fines and confiscations amounting to 3.597 billion yuan. Additionally, under Article 75 of the Implementation Regulations of the Food Safety Law of the People's Republic of China, the legal representatives and food safety directors of the seven platform companies were collectively fined 19.6874 million yuan.
Investigations revealed that these e-commerce platforms failed to strictly review the licenses of online food operators and did not fulfill their legal obligations for qualification checks. They also entered into cooperation agreements with order-transferring platforms, knowingly or negligently allowing practices that harmed consumer rights without taking necessary measures. The legal representatives and food safety directors of these platforms, responsible for food safety management, failed to fully perform their duties. These actions seriously violated relevant provisions of the Food Safety Law, the E-Commerce Law, and the Implementation Regulations of the Food Safety Law of the People's Republic of China.
Following the launch of the investigation, the State Administration for Market Regulation immediately instructed the e-commerce platforms to implement corrective measures. All seven platforms have since removed unverified "ghost shops" and terminated catering order-transfer partnerships with relevant platforms.
According to the administrative penalty decision, Zhao Jiazhen, the legal representative of Shanghai Xunmeng Information Technology Co., Ltd., was fined 6,937,295.46 yuan. The company, as a third-party platform provider for online food transactions, failed to perform its obligation to review qualifications as required by law. The prolonged nature of the violations, the large number of shops involved, the wide impact, and the high food safety risks constituted a "serious violation" under the regulations.
The decision stated that Zhao Jiazhen must pay the fine within 15 days of receiving the penalty notice. Failure to do so will result in an additional 3% daily penalty, with enforcement pursued through the People's Court. Zhao retains the right to apply for administrative reconsideration within 60 days or file an administrative lawsuit within six months, though the penalty will be enforced during any appeal process.
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