Shanghai’s market watchdog has imposed an RMB 500,000 ($77,000) fine on Alibaba-backed operator of food delivery app Ele.me for misleading consumers on prices and food safety, according to an announcement Monday.
Why it matters: This fine is the latest move in a broader crackdown on the country’s biggest internet companies, across sectors and for different violations.
- The amount is trivial for the company, but it’s likely to take it as a warning.
- The fine on the Alibaba-backed company comes as its rival Meituan is still under antitrust investigation.
Check out TechNode’s Techlash Tracker for an overview of the crackdown.
Details: Shanghai’s market regulator announced Monday April 30 fines totaling RMB 500,000, for giving misleading pricing about its services and hosting non-qualified merchants.
- From July to August last year, Ele.me promoted within its app special deal zones offering up to 90% discounts to lure customers. An investigation found that not all the deals listed in the promotional zones offered the low discounts the app promoted.
- The regulator imposed an RMB 300,000 fine under China’s Price Law.
- At the same time, the company was penalized for listing 62 unlicensed restaurants in Tianjin.
- For failing to fulfill its responsibility to monitoring merchant qualifications, Ele.me received another RMB 200,000 million fine for violating China’s Food Safety Law.
- Regulators said the Shanghai-based firm did not request a hearing after receiving the notice on April 26.
- Ele.me could not be reached immediately for comment.
Context: The fine comes amid a wave of penalties for large and small platform companies.
- China’s top antitrust regulator recently issued a record RMB 18.2 billion ($2.8 billion) fine on e-commerce giant Alibaba for antitrust practices.
- Sherpa, a Shanghai-based English-language food delivery app, was fined RMB 1.2 million in April for abusing a monopoly position in English-language food delivery.