China’s top antitrust regulator on Friday imposed a RMB 3.4 billion ($534 million) fine on Chinese food delivery giant Meituan for antitrust practices.
Why it matters: 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.
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Details: The State Administration for Market Regulation (SAMR), China’s top market watchdog, said in a Friday statement (in Chinese) that it had issued a RMB $534 million fine on Meituan six months after launching an investigation of the food delivery giant.
- Regulators said the investigation found that Meituan had forced restaurants and other merchants to list exclusively on its platform, a practice commonly known as “forced exclusivity.”
- Meituan punished merchants who refused to comply by charging higher commission rates, giving them less exposure on 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 comparison, Alibaba’s April fine was about 4% of its annual revenue.
- 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 in a Friday response (in Chinese) that it has “accepted the penalty with sincerity and will ensure our compliance with determination.”
Context: China’s antitrust crackdowns this year have punished some of the country’s best-known tech companies, including Tencent and Alibaba.