(Yicai) July 8 -- China’s market watchdog imposed fines and confiscations amounting to CNY3.6 billion (USD530 million) on seven of the country’s largest e-commerce and on-demand services platforms in the first six months, as the regulator steps up enforcement against “phantom delivery” fraud involving online merchants that operate without legitimate physical premises.

The legal representatives and food safety directors of Pinduoduo, Meituan, JD.com, Ele.me (Taobao Flash Buy), Douyin, Taobao and Tmall, were also fined a combined CNY19.6 million (USD2.9 million) for failing to prevent “phantom delivery” merchants from operating on their platforms, Wang Shizhong, director of the State Administration for Market Regulation’s competition coordination department, said yesterday.

The term “phantom delivery" refers to online merchants that operate on delivery platforms without having a physical location. These vendors use fraudulent means to disguise themselves as legitimate restaurants, despite lacking actual places of operation.‌‌

SAMR yesterday also released a summary of its efforts to tackle involution-style competition, or excessive and self-defeating competition, in the first half.

In the antitrust area, the regulator disclosed the progress of Lalamove's compliance with antitrust rectification measures. The logistics platform has stopped using algorithms to suppress freight rates, abolished its exclusive vehicle sticker requirement and reduced its average commission rate to around 9 percent from about 11 percent, Wang Shizhong said.

These measures will reduce drivers’ costs by over CNY1.3 billion (USD191.2 million) annually, while CNY120 million (USD17.6 million) in unreasonable fees has been refunded to drivers., Wang Shizhong said.

SAMR also approved internet behemoth Tencent Holdings' acquisition of a stake in audio sharing platform Ximalaya subject to restrictive conditions and said it is continuing its antitrust investigation into online travel agency Trip.com’s monopoly case.

Separately, during the first half, SAMR issued a notice on further implementing China’s Anti-Unfair Competition Law and launched a special enforcement campaign targeting unfair competition practices.

Authorities handled 11,465 cases of unfair competition nationwide during the first six months, including 2,005 cases involving false online advertising and online commercial defamation, Wang Jiheng, deputy director of the SAMR’s price supervision and anti-unfair competition bureau, said yesterday.

In terms of advertising regulation, authorities investigated 15,000 advertising law violations during the first five months and imposed CNY69.3 million (USD10.2 million) in fines, Wang Jiheng said.

Editor: Kim Taylor