China imposed record fines totaling 3.6 billion yuan ($494 million) on seven of its largest e-commerce platforms for allowing ghost kitchens to process millions of fraudulent cake orders, authorities announced April 17, 2026 [1]. The platforms penalized were Pinduoduo, Meituan, JD.com, Ele.me, Douyin, Taobao, and Tmall [1].
The probe uncovered more than 67,000 ghost kitchens operating without physical storefronts, with some processing over 3.6 million fake cake orders [1]. Officials found that all 378 outlets nationwide of the shop 'Tian Yan Qing Shu' lacked actual stores and used forged food business licenses [1]. These ghost kitchens used the Zhuandanbao app, an order-rerouting platform with an auction system, to subcontract orders illicitly. While the auction system itself was not illegal, it facilitated widespread fraud and illegal subcontracting [1]. Zhuandanbao was removed from app stores by early May 2026 [1].
In addition to the platform fines, legal representatives and food safety directors of these services were fined a combined 19.69 million yuan [1]. Authorities also suspended new bakery registrations on the platforms for periods ranging from three to nine months [1].
The investigation began in July 2025 after a Beijing resident complained of non-food-grade flowers found on a cream cake purchased online [1]. Since February 2026, a new policy requires merchants to operate from distinct physical locations and mandates platforms disclose takeout-only stores to reduce such abuses [1].
Officials described the penalties as the largest under China’s Food Safety Law since it took effect in 2009 following the 2008 milk scandal [1]. The regulatory crackdown aims to clean up fraudulent food sales on major digital platforms and protect consumer safety.
New bakery registrations on these platforms will remain suspended for three to nine months as the government monitors compliance [1].