Chinese regulators tightened oversight on food delivery platforms, imposing record fines over food safety lapses and weak merchant screening.

Regulatory Action And Record Penalties

China's State Administration for Market Regulation fined major platforms, including Alibaba Group Holding Limited (NYSE:BABA), PDD Holdings Inc (NASDAQ:PDD), and Meituan (OTC:MPNGY), for failing to block unqualified merchants.

The watchdog collected a total of 3.6 billion yuan ($528 million) through fines and confiscations, also targeting JD.com, Inc (NASDAQ:JD) and ByteDance's Douyin. Authorities described it as the largest penalty on delivery platforms since the food safety law was updated in 2015, Bloomberg reported on Friday.

Alibaba held $80.10 billion in cash and equivalents as of Dec. 31, 2025.

Investigation Findings And Violations

Regulators launched the action after local probes uncovered "ghost deliveries," where merchants used fake addresses and falsified licenses to operate on platforms. In some cases, sellers outsourced orders without notifying customers.

Authorities found that the platforms failed to implement the strict merchant verification systems required under the law, though they removed unlicensed vendors after investigations began. Officials also fined legal representatives and executives responsible for food safety a combined 19.7 million yuan.

Industry Response And Rising Scrutiny

Meituan said it will strengthen compliance, crack down on illegal practices, and upgrade its delivery governance systems in response to the penalty. Other companies did not immediately comment.

The crackdown comes as China's highly competitive delivery market faces intense price wars, prompting regulators to increase scrutiny and warn companies to protect merchants and consumers better.

Chinese regulators previously imposed a major antitrust penalty on Alibaba, fining the company $2.8 billion in 2021—about 4% of its 2019 revenue—after finding it engaged in the "pick one from two" monopoly practice, marking one of the most significant actions in the country's broader tech crackdown.

Price Action: Alibaba shares were up 2.56% at $142.13, and PDD Holdings shares were up 1.15% at $104.90 at the time of publication on Friday, according to Benzinga Pro data.

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