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After fining Alibaba, Chinese regulators start antitrust probe into Meituan

Written by Song Jingli Published on     2 mins read

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Earlier this month, Meituan was among 34 tech firms that were urged to correct anti-competition practices.

The State Administration for Market Regulation (SAMR) said on Monday that it has initiated an antitrust investigation into Meituan. The regulator suspects that Meituan forced merchants to cut connections with rival marketplaces by invoking the so-called “choose one out of two” mechanism, which was the same reason for Alibaba’s RMB 18.2 billion (USD 2.8 billion) fine. Meituan pledged to actively cooperate with the investigation in a filing with the Hong Kong Stock Exchange on Monday.

The company was among 34 tech firms summoned earlier this month by the SAMR, the Cyberspace Administration of China, and State Taxation Administration. It was urged to correct anti-competition practices within one month. The authorities, however, didn’t wait that long before starting their inquest.

“I am not sure about the depth of this probe into Meituan,” said Liu Xu, a researcher with the National Strategy Institute at Tsinghua University. The authorities might also scrutinize two deals involving Meituan, which the company didn’t declare for antitrust review, Liu added, referring to the merger with Dianping and the sale of its controlling stake in movie ticketing platform Maoyan to Enlight Media.

This is not the first time that the government has looked into the company. In 2017, the local market regulator in Jinhua, Zhejiang Province, fined Meituan RMB 526,000 (USD 81,115) for its “select one out of two” practice, but this case did not lead to a nationwide investigation.

Last year, the Guangdong Restaurant Association, along with another 32 trade associations, appealed to Meituan to remove “monopoly clauses” in its agreements and to lower commission fees, exposing the strained relationship between the platform and its vendors.

The Intermediate People’s Court in Huai’an, Jiangsu Province, ruled against the food-delivery firm earlier this month for pressuring vendors to close their shops on Ele.me or otherwise face increased commission fees.

Last month, the SAMR also fined Meituan’s community group-buying subsidiary RMB 1.5 million (USD 230,000) for selling groceries below cost and for misleading consumers with non-existing discounts.

Meituan has also been sued by an individual who accused the company of violating anti-monopoly laws for removing Ant Group’s Alipay as a payment channel on its app.

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