‘Phantom’ Food Delivery Dealt a Heavy Blow! Pinduoduo (拼多多)'s Soft Anti-Competitive Tactics Fined and Confiscated Over ¥1.5 Billion; Multiple Alibaba-Affiliated Companies (阿里系多家公司) Also Penalized

Enforcement action

It has been reported that China’s market regulator, the State Administration for Market Regulation (SAMR, 国家市场监督管理总局), has fined and confiscated more than ¥1.5 billion from Pinduoduo (拼多多) over so‑called “soft” anti‑competitive practices in the food‑delivery ecosystem. The penalties target non‑violent tactics that allegedly steered orders, privileged certain merchants and distorted competition without resorting to outright price fixing. Multiple Alibaba‑affiliated companies (阿里系多家公司) were reportedly hit with separate penalties in the same sweep.

What "soft" tactics mean

Soft anti‑competitive conduct is harder to police than classic cartels. It can include algorithmic steering, preferential traffic allocation, forced exclusivity clauses and, in some cases, the creation of “phantom” or manipulated order flows to boost selected partners’ metrics. Regulators say these practices harm rivals, erode consumer choice and undermine smaller delivery platforms and couriers. Reportedly, the SAMR’s investigation focused on how platform rules and recommendation engines were used to shape market outcomes rather than on explicit price collusion.

Context and implications

Beijing’s move follows a multi‑year tightening of rules on China’s internet giants that began in 2020, when authorities pressed for fairer competition, stronger data governance and fewer monopolistic practices. Why now? Regulators continue to signal that platform governance and algorithmic fairness are priorities as China's digital economy matures. The action also arrives against a backdrop of heightened geopolitical scrutiny—U.S.‑China tech tensions and trade policy frictions make regulatory clarity at home especially important for both domestic platforms and foreign investors.

The fines send a clear message: platform design choices are under legal and political scrutiny. Companies such as Pinduoduo and the Alibaba affiliates will likely need to revise contract terms, recommendation algorithms and merchant incentives to avoid further penalties. Will that change the way China’s platforms steer users and merchants? Regulators seem intent on finding out.