Exclusive: Small businesses jumping on a seemingly harmless celebrity AI trend could land in hot water with the likes of Prince Harry and Meghan.

Dozens of Australian brands posted AI-generated images of the royals 'visiting' their stores or sampling their products as a bit of fun during their Australia tour last week.

But a consumer law expert said the posts could be in breach of the Australian Consumer Law.

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Luke, owner of Nina's Cucina in Melbourne, shared an AI image of the royals eating at the café as a joke after seeing other hospitality venues do it.

The Instagram post got more than 800,000 views.

Most people knew it was AI right away but a few were fooled, at least upon first glance.

"We had phone calls from Canada, from family over there, angry that we hadn't told them that the royals were visiting our shop," Luke told nine.com.au.

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A customer's complaint about a disappointing cake kicked off a massive investigation that uncovered thousands of "ghost" food vendors in China, resulting in staggering fines for some of the country's largest firms and highlighting the pitfalls of the cutthroat price competition.

The inquiry –– marked by scuffles between investigators and delivery service employees, a feigned medical emergency and hastily scribbled notes to "stay silent" –– began last summer when a man in Beijing, identified as Liu, received a birthday cake decorated with an inedible flower, according to multiple state media accounts.

Liu ordered the cake through an online delivery platform and, unsatisfied with his purchase, reported the vendor to local authorities.

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What regulators found was a bogus cakery chain, boasting nearly 400 locations, operating with forged food business licences and no physical storefronts to be found.

The incident triggered a full-scale nationwide probe and uncovered a shadow food supply chain, in which a merchant would charge a customer for their order then turn around and post the order on an intermediary platform for other producers to bid on, with the lowest bidder chosen to fulfil the order, sacrificing both food quality and safety.

In total, more than 67,000 such "ghost" vendors, which had sold more than 3.6 million cakes, were discovered, state news agency Xinhua reported.

China's market regulator, the State Administration for Market Regulation, concluded in its inquiry last week that seven major delivery platforms, including Temu's owner PDD, Alibaba, ByteDance's Douyin, Meituan and JD.com, failed to adequately protect customers and properly verify food vendors' licences.

It imposed a record fine of 3.6 billion yuan ($738 million) altogether – the largest penalty since the amendment of the country's food security law in 2015, according to Xinhua.

The 10-month investigation underscores Beijing's efforts to crack down on intense price competition that has driven companies, into an untenable self-defeating cycle, in this case, lower prices on delivery platforms at the expense of food safety.

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Known as involution or neijuan in China, the intense price wars have spread across industries in recent years, from electric vehicles to solar panels. The trend has exacerbated China's deflation problem and weighed on the economy as prices decline and consumption weakens.

In response, Beijing kicked off an anti-involution campaign last year, vowing to curb such unhealthy practices across its economy. Last month, state-run newspaper Economic Daily published a commentary calling for an end to the food delivery price wars.

"Food and beverage businesses have been forced to sacrifice quality and compress margins, pushing the entire industry into a vicious cycle of losing money just to generate volume," it wrote.

Flora Chang, an analyst at financial services firm S&P Global Ratings told CNN the government's proactive intervention has had some initial effect in curbing unhealthy competition, but platforms could find alternative ways to compete, including deploying subsidies in other forms.

"That said, the fines are paving the way for platforms to compete more on quality … Overall, this suggests the worst of the unhealthy competition may be behind us for now, although the road to a recovery in profitability remains a distant one," Chang said.

In one example disclosed by Xinhua, a consumer paid 252 yuan ($49) for a 15-centimetre cake, but the order was quietly resold through an intermediary platform where vendors bid 100, 90 and 80 yuan to fulfil it, with the lowest bidder winning. The result was the "ghost" merchant pocketing nearly half of the price paid by the consumer, while the delivery platform took home a 20 per cent service fee –– leaving the real baker with 30 per cent and a thin profit margin.

"This is by no means a minor violation, but a new form of illegal activity — one that has become industrialised and scaled," Han Bing, an official with the State Administration for Market Regulation, told Xinhua.

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Acts of Resistance

While mapping out the illegal supply chain regulators were met with uncooperative employees from the delivery platforms, according to state-run China Quality Daily.

At one point, as regulators were questioning an employee of one of the country's largest food delivery services, a colleague nearby quietly scribbled "stay silent" on a sheet of A4-sized printer paper and passed it along. When officials noticed, the person crumpled the page and, in front of everyone, swallowed it.

In another instance at the same unspecified firm in December, the head of security led a group to storm the investigation site, pushing and shoving law enforcement officers violently, the media outlet reported.

That was followed days later by an executive abruptly collapsing during questioning and being taken away by ambulance, only for doctors to later find no serious medical issue, the media report said.

Investigators described these episodes as part of a pattern of obstruction. Even when other companies did not resort to direct confrontation, they delayed, resisted handing over data, or supplied incomplete information to authorities.

The market regulator handed PDD the heftiest penalty among the seven firms fined, 1.5 billion yuan ($309 million), citing the e-commerce giant's repeated refusal to provide relevant information, the submission of false materials, and sometimes violent resistance to regulatory enforcement.

In an online statement last week in response, PDD said it would comply with the penalties, while pledging to take this as a lesson to improve its operations. CNN has reached out to PDD for comment on the details of its resistance to the probe.

Alibaba, Douyin, Meituan and JD have released similar statements, saying they sincerely accept the penalties and would strengthen their compliance and governance to root out the malpractices.

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A record number of illegal vapes and tobacco products have been intercepted by the Australian Border Force (ABF) in a major blow to the black market.

Officers today served up a stern warning to anyone involved in the booming trade.

The almost 1000-tonne bust – nearly three-quarters of it in NSW – is one of the ABF's biggest ever.

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"That prevented more than $2 billion worth of duty being stolen from the Australian taxpayer," ABF customs compliance and enforcement Assistant Commissioner Tony Smith said today.

In just four months, hundreds of tonnes of loose-leaf tobacco and 800 million cigarettes have been seized.

If laid end to end the cigarettes would stretch more than 71,000 kilometres, which is almost enough to wrap around Earth twice.

Four million vapes were also among the seizures. 

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"It reflects a concerted and targeted effort across all of our domains, from the air and sea, to the traveller and mail," Operation Printwall commander Andrew Tankey said.

The majority of illicit products stripped from the supply chain came from Asia.

One woman arrived from Bali with boxes upon boxes of cigarettes, far more than the legal limit.

Offshore, the ABF also blocked more than 35 million cigarettes and 560,000 vapes from even arriving into Australia.

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"Make no mistake, this is intelligence-led enforcement at pace and scale," Smith said.

"If you move it, you store it or distribute it, you're in our sights."

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A man accused of fatally bashing Labor identity Tim Picton has admitted assaulting another man.

Brodie Jake Dewar, 20, is facing a manslaughter charge after allegedly attacking Picton, 36, in Northbridge, in Perth's inner city, in the early hours of December 27.

He was also accused of causing bodily harm over an incident in the Perth suburb of Kalamunda on December 25 shortly after midnight, when he allegedly punched another man to the ground outside a pub.

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Dewar, who is on bail, pleaded guilty today in Armadale Magistrates Court to the lesser charge of assault occasioning bodily harm over the incident.

A Perth court previously heard Dewar knocked the man in his 40s unconscious after an incident involving the younger man's sister.

Dewar then recorded the man lying on the ground with his mobile phone and said "don't hit on my sister" and "bro, keep snoring", the court was told.

Dewar then used the heavily intoxicated man's phone to call him an Uber after his friends helped him.

The man suffered minor injuries and later told police he didn't remember the incident, which was recorded on CCTV.

Dewar is scheduled to reappear in Armadale Court for sentencing on May 6.

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He is scheduled to appear in Stirling Gardens Magistrates Court on April 29 on the manslaughter charge relating to Picton's death.

Picton, who has been lauded as a brilliant political tactician, died in hospital several weeks after hitting his head on the pavement during the incident with Dewar.

His death triggered an outpouring of grief from his family, friends and colleagues, as tributes flowed from the prime minister, several premiers and business leaders.

Picton had advised state and federal politicians, and helped guide WA Labor to a landslide 2021 election victory.

A Perth court has previously heard Picton was ejected from the Paramount Nightclub due to intoxication.

He had repeatedly grabbed Dewar's 18-year-old cousin around the waist and made unwanted advances towards her, defence lawyer Simon Watters has previously told the court.

The young woman, Dewar and others in their group repeatedly told Picton to stop and go away, but the unwanted attention continued, the court heard.

Dewar allegedly struck Picton's face outside a fast-food restaurant and he fell to the ground, hitting his head.

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Strike Four rolled over on Saturday, adding $700,000 to tonight’s prize pool.

The theft follows recent diesel raids in Waikato and Marton involving thousands of litres.