China's State Administration for Market Regulation (SAMR) is set to fine Meituan the equivalent of $ 1 billion in the near future. The company is accused of misusing its dominant market position, which has negatively impacted contractors and competitors.
The decision to recover the fine could be published in the coming weeks, Wall Street Journal sources say. In addition to the actual monetary fine, Meituan will have to fundamentally revise its activities and put an end to anti-competitive practices, which in China are called "choose one of two".
Meituan has a market capitalization of about $ 170 billion, making it China's third publicly traded Internet company after Tencent and Alibaba. The company operates a marketplace that is home to millions of Chinese restaurants and small businesses and is China's largest food and related delivery service. In addition, Meituan offers hotel booking services and sells its own grocery products online.
Recall that on similar charges in April this year, the Alibaba holding was fined $ 2.8 billion. According to the regulator, the company applied penalties to sellers who tried to sell their goods not only on its site, but also on others. The fine was 4% of Alibaba's annual revenue in China.
The agency is confident that Meituan has resorted to similar practices, not allowing its partners to sell goods on competing sites. In this regard, in April 2021, an investigation was opened into the violation of antimonopoly legislation. The company declared its full readiness to cooperate with the investigation and undertook to strictly follow the letter of the antimonopoly legislation in the future. Meituan's revenue in 2020 was $ 17.8 billion. Under Chinese law, the penalty for antitrust violations is 10% of the company's annual sales.
Meituan is one of the largest players in the Chinese economy, employing millions of employees who are often unemployed and receive hourly wages. Chinese regulators recently lashed out at Meituan for mistreating delivery staff and independent contractors. In response, the company promised to provide all carriers with insurance that would help them get qualified medical attention in case of accidents. In addition, Meituan has adjusted the billing system for restaurants and contractors, lowering fees and ending the practice of concluding exclusive contracts.
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