China Fines E-Commerce Giants 3.6 Billion Yuan Over Unfair Competition

China's State Administration for Market Regulation has intensified its campaign against cutthroat 'involutionary' competition, fining seven major e-commerce platforms a combined 3.597 billion yuan ($500 million) over unlicensed 'ghost food delivery' operations. Regulators also imposed 19.69 million yuan in personal fines on the platforms' legal representatives and food safety directors. In the first half of the year, authorities investigated 11,465 unfair competition cases nationwide. In parallel, officials confirmed they are revising the Pricing Law to curb predatory below-cost dumping and establish clearer regulatory boundaries.

The sweeping enforcement and personal liability for platform executives mark a significant shift toward holding tech giants accountable for operational compliance and food safety. By penalizing both firms and leadership while preparing stricter statutory rules against predatory pricing, regulators aim to curtail margin-destroying price wars and redirect market dynamics toward product quality and consumer safety.

China's market regulator has levied 3.597 billion yuan in fines and confiscations against seven major e-commerce platforms as part of a nationwide campaign to rein in destructive 'involutionary' competition and food safety violations, according to state media reports. The State Administration for Market Regulation targeted unlicensed online food vendors—commonly referred to as 'ghost delivery' operations—across major platforms including Pinduoduo, Meituan, JD.com, Ele.me (Taobao Flash Purchase), Douyin, Taobao, and Tmall. In an unusual step, regulators also imposed personal penalties totaling 19.6874 million yuan on key executives, specifically the legal representatives and food safety directors of the seven platforms, penalizing them for failing to prevent non-compliant vendors from operating. According to regulatory figures released for the first half of the year, authorities nationwide investigated 11,465 cases of unfair competition. Among these, 2,005 cases involved online false advertising and commercial defamation, highlighting a broad regulatory push to clean up digital marketplace practices. Beyond administrative penalties, Chinese authorities are preparing legislative measures to address underlying market dynamics. Tang Kexin, deputy director of the market regulator's Legal Affairs Department, stated that officials are actively advancing revisions to the Pricing Law. The proposed amendments seek to refine criteria for identifying improper pricing behaviors, such as below-cost dumping, expand enforcement mechanisms, and deter businesses from engaging in bottomless price competition. Liu Xiaochun, director of the Internet Rule of Law Research Center at the University of Chinese Academy of Social Sciences, noted that competing solely through aggressive price cuts often forces operators to slash production and operational costs. This dynamic frequently leads to deteriorating product quality, the entry of substandard goods into the market, and severe margin compression for small and medium-sized merchants. Wang Jiheng, deputy director of the Price Supervision and Anti-Unfair Competition Bureau at the regulatory agency, reaffirmed that regulators intend to balance compliance supervision with sector development, maintaining sustained pressure on destructive market practices to promote fair competition.