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The national market regulation authority has levied fines and confiscated assets totaling 3.6 billion yuan (approximately $530 million) from seven major e-commerce and on-demand service platforms in the first half of the year. This crackdown targets “phantom delivery” fraud where online merchants operate without tangible storefronts.
Senior executives and food safety officials from platforms such as Pinduoduo, Meituan, JD.com, Ele.me, Douyin, Taobao, and Tmall were collectively fined 19.6 million yuan (about $2.9 million) for failing to prevent these deceptive merchants from operating on their sites, according to a recent statement from the competition regulation division.
“Phantom delivery” refers to online vendors that appear to be legitimate restaurants but lack actual physical locations. These operators often use fraudulent tactics to conceal the absence of real premises.
The agency also summarized efforts to address overly aggressive competition, often called involution. Concerning antitrust actions, the authority reported that logistics company Lalamove has complied with measures to correct its practices. The platform has discontinued using algorithms to artificially suppress freight prices, removed exclusive vehicle sticker requirements, and lowered its average commission rate from roughly 11% to 9%.
These reforms are expected to cut drivers’ costs by over 1.3 billion yuan annually (about $191 million) and have led to refunds exceeding 120 million yuan ($17.6 million) to drivers for unfair fees.
In addition, the authority approved Tencent’s acquisition of a stake in the audio-sharing platform Ximalaya, albeit under strict conditions, and continues to investigate whether online travel giant Trip.com is engaging in monopolistic practices.
Throughout the first half of the year, the regulator intensified efforts to enforce anti-unfair competition laws, launching a special campaign to curb such practices. The authorities handled more than 11,400 cases nationwide, including over 2,000 related to false online advertising and defamation.
Furthermore, during this period, inspections uncovered 15,000 violations of advertising laws, resulting in fines amounting to 69.3 million yuan (about $10.2 million).
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