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October 11, 2021

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Meituan hit with US$533m penalty

China’s market watchdog on Friday fined the Internet giant Meituan 3.442 billion yuan (US$533 million) for abusing its dominant position in the online food delivery platform market and ordered the company to “comprehensively rectify” its operations.

The fine is equal to about 3 percent of the Meituan’s total domestic sales revenue of 114.7 billion yuan in 2020, according to China’s State Administration for Market Regulation.

The watchdog began investigating the case in April, and found that, since 2018, Meituan had abused its market position in domestic food delivery services, forcing merchants to sign exclusive cooperation agreements.

The company was also found to have taken multiple punitive measures, including charging merchant deposits and employing technological tactics involving data and algorithms, pressuring those merchants to “pick one out of two” to exclude competitors and limit competition.

Those behaviors have weakened the innovative dynamics and vitality of the platform, and harmed the interests of the platform merchants and consumers, said the SAMR.

It has ordered Meituan to stop illegal activities, return nearly 1.29 billion yuan in deposits paid by merchants.

Meituan has also been ordered to comprehensively rectify its misconduct, including improving the commission charging mechanism and algorithm rules, safeguarding the legitimate interests of small and medium-sized catering businesses on the platform, and strengthening the protection of the lawful rights and interests of the delivery personnel.




 

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