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China fines Meituan less-than-expected US$530 million for monopolistic behaviour, ending five-month antitrust probe
- The ‘pick one from two’ tactic, in which merchants are forced to choose only one platform as their distribution channel, has been widespread in China
- Meituan, founded by the 42-year-old billionaire Wang Xing, was previously urged to improve its working conditions
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China slapped on-demand local services provider Meituan with a 3.44 billion yuan (US$533 million) fine on Friday for abusing its dominant market position through its “pick one from two” practice, putting an end to the government’s five-month antitrust investigation.
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The fine was equivalent to about 3 per cent of Meituan’s total domestic revenue of 114.7 billion yuan last year, according to antitrust watchdog the State Administration for Market Regulation (SAMR).
It was also smaller than previous estimates and reports. In August, The Wall Street Journal reported that Beijing planned to impose a US$1 billion on Meituan.
By comparison, e-commerce giant Alibaba Group Holding paid in April a record 18.2 billion yuan fine, equivalent to 4 per cent of its 2019 domestic sales, to conclude its own antitrust investigation. Alibaba, parent company of the South China Morning Post, competes with Meituan through its own food delivery service Ele.me, which has about a 20 per cent share of that market segment.
The SAMR also ordered Meituan to refund exclusive cooperation deposits paid by merchants, totalling 1.29 billion yuan.
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