The companies involved include Pinduoduo (owner of Temu), Meituan, JD.com, ByteDance's platform Douyin, and Alibaba's services Ele.me, Taobao, and Tmall. In addition to the corporate fines, personal fines totaling 19.69 million yuan were also issued to the legal representatives and managers responsible for food safety within the seven companies.
According to the state market regulator, the platforms have failed to conduct adequate checks of the business licenses of affiliated restaurants and stores. China Daily notes that a lack of oversight of so-called "dark kitchens" has been identified as a central reason for the decision. The authority also states that the companies entered into agreements with intermediaries for order processing, despite knowing – or should have known – that this entailed risks to consumer rights.
As a result of the review, the regulator has paused the ability for the seven platforms to connect new sellers of cakes and desserts for a period of three to nine months. Following the investigation, all companies are reported to have removed unverified sellers from their platforms and terminated collaborations with third-party actors linked to the violations.
Pinduoduo stated in a written statement that they "sincerely accept and will resolutely comply with" the regulator's decision.
We will take this as a lesson, further standardize our business processes, and make optimizations and improvements, the company announced.
Meituan, ByteDance, and Alibaba had not provided any comments to Reuters at the time of publication.
The market for food delivery and quick commerce in China is characterized by high competition. Players such as Alibaba and JD.com have launched extensive discount campaigns on goods such as ice cream and coffee over the past twelve months to gain market share. The intense competition for deliveries within an hour has put pressure on margins in the industry and has previously prompted Chinese authorities to warn the platforms about a "race to the bottom".