(Bloomberg) — China levied a $533 million fine on Meituan after a months-long probe found the food-delivery behemoth had violated anti-monopoly regulations.
The State Administration for Market Regulation imposed a 3.44 billion yuan fine on Meituan, amounting to 3% of its 2020 domestic revenue, according to a statement Friday. The company will also have to return 1.29 billion yuan of deposits stemming from exclusivity arrangements. Billionaire Wang Xing’s firm was told to improve its commissions mechanism, ensure the legal rights of restaurant partners and step up protections for its delivery riders.
Meituan said in a statement it sincerely accepted the penalty and will resolutely implement the regulators’ instructions. The fine and accompanying penalties were less harsh than feared, given some analysts had speculated the food delivery giant may have to find ways to compensate its army of contract workers.
The antitrust watchdog had announced an investigation into Meituan in April, weeks after slapping a record $2.8 billion fine on Alibaba Group Holding Ltd. for abusing its market dominance. The probe signaled Beijing was extending its crackdown beyond billionaire Jack Ma’s tech empire, as it sought to curtail the growing influence of technology giants over every aspect of Chinese life as well as the vast amounts of data they’ve amassed through providing services like online shopping, chatting and ride-hailing.
Since then, the tech crackdown has extended to other aspects of the industry, including a sweeping clampdown on online education and the launch of a cybersecurity investigation into Didi Global Inc. days after the firm’s blockbuster U.S. listing. In July, authorities ordered China’s online food platforms — of which Meituan is the largest — to ensure workers earn at least the local minimum wage.
Xi Jinping declared his intention in March to go after “platform” companies that amass data to create monopolies, keen to exert control over a valuable asset deemed critical for the economy and stability. His administration is also moving swiftly to ensure the country’s sharing-economy behemoths improve the welfare of the millions of low-wage workers they depend on to power growth. That stems from Xi Jinping’s “common prosperity” campaign to get the private sector to share the enormous wealth accumulated during a decade-long internet boom.
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