Friday headlines revealed that Chinese food delivery giant Meituan got fined by the country’s top antitrust regulator. A hefty RMB 3.4 billion ($534 million) was fined on Chinese food delivery giant Meituan for antitrust practices.
Reason behind Meituan getting fined
The hefty penalty on Meituan is yet another anti-competitive strike from Chinese regulators. In April, regulators slapped a record $2.8 billion fine on Chinese e-commerce giant Alibaba for similar offenses.
The State Administration for Market Regulation (SAMR), China’s top market watchdog, said in a Friday statement (in Chinese) that it had issued an RMB $534 million fine on Meituan six months after launching an investigation of the food delivery giant.
According to the regulators, the investigation found that Meituan had forced restaurants and other merchants to list exclusively on its platform. This practice is commonly known as “forced exclusivity.
How Meituan applied forced exclusivity?
As per the reports, Meituan punished merchants who refused to comply by charging higher commission rates. Thus, giving them less exposure to the app, and imposing other unfair practices.
The penalty is equivalent to 3% of Meituan’s RMB 114.7 billion revenue generated in the calendar year of 2020 in China. For Alibaba, this penalty was 4% (amounted to $2.8 billion ) of its revenue generated in April.
The regulator also required Meituan to refund exclusive partnership deposits to merchants on the platform, amounting to RMB 1.3 billion.
The regulator ordered the company to revamp its operations and file self-examination compliance reports to SAMR for the next three years.
The company said that it has accepted the penalty with sincerity and will ensure our compliance with determination.
China’s antitrust crackdowns this year have punished some of the country’s best-known tech companies, including Tencent and Alibaba.