China fines major e-commerce platforms $500 million over ghost vendors
China just fined major e-commerce and delivery platforms, including Taobao, JD.com, Meituan, Pinduoduo, and Douyin, a whopping $500 million.
Why? Regulators discovered thousands of "ghost vendors" using fake business licenses to dodge safety checks and sell food online.
The crackdown started after a Beijing resident complained that a birthday cake order arrived decorated with an inedible flower, prompting an investigation that uncovered the scale of the problem.
Pinduoduo fined $219 million, vendor additions paused
Pinduoduo got hit especially hard with a $219 million fine and can't add new vendors for now.
All the platforms are under pressure to step up their game, meaning stricter checks on who gets to sell food online.
China's regulators say this is about making sure what you order is actually safe to eat and that sellers play by the rules in the growing world of app-based deliveries.