Meituan fined $533.5m for unfair practices
Penalty milder than Alibaba due to difference in rectification moves
Chinese food delivery platform Meituan was fined 3.44 billion yuan ($533.5 million), or 3 percent of its 2020 domestic revenue, for monopolist practices by China’s top market regulator on Friday. The company was also ordered to immediately stop illegal activities and give full refund of exclusive cooperation deposit of 1.29 billion yuan to contracted vendors.
The penalty on Tencentbacked Meituan marks the second-biggest fine on Chinese internet platform since Alibaba was slapped a record $2.8 billion antitrust fine in April by regulators for exclusionary practices. The amount accounts for about 4 percent of Alibaba’s domestic sales in 2019.
The 3 percent fine is relatively mild and lower than market expectation. Between April 2012 and June 2020, Chinese companies were slapped with an average 3.67 percent fine on their revenue, relevant report showed.
Observers said that there is a differe nce between the nature, degree, monopolist lasting time and the rectification moves of Meituan and Alibaba.
According to the State Administration for Market Regulation (SAMR), Meituan has taken the initiative to recognize its monopolist practices, provide important piece of evidence that the law enforcement agencies have not acquired, and launch comprehensive self-rectification. SAMR said it has also taken account of those moves when making the decision on penalties.
“The penalty is more than a warning to platforms. The lower-than-average standard fine shows that the regulator’s penalty is not aimed at cracking down internet companies, but to guide more companies to follow the suit of Meituan – speak frankly and sincerely about misconducts and actively correct them, to build a favorable environment for the industry,” Wang Peng, an assistant professor at the Gaoling School of Artificial Intelligence at the Renmin University of China, said on Friday.
“It could put an end to the chaotic exclusive deals in the food delivery industry,” Wang said, adding that the Chinese regulator is not resorting to a “one-size-fits-all” approach on antitrust practices, and is more pragmatic and flexible in handling monopolist cases.
Fang Xingdong, founder of Beijing-based technology think tank ChinaLabs, also told the Global Times on Friday that Meituan’s case has less social impact and business magnitude, and that’s why the rate of fine on Meituan is softer than that of Alibaba.
“The case of Meituan also carries a special weight as it shows the Chinese government’s concern for small- and medium-sized companies, as well as for workers and delivery riders. Technologies are supposed to improve people’s livelihood, rather than be taken advantage and exploit them,” Wang added.