China’s General Administration of Market Regulation (GAMR) said on Monday (April 26) that it had filed a case against Meituan for alleged monopolistic practices such as “choosing one over the other” based on reports.
Meituan is a one-stop platform for “eating, drinking, traveling, touring, shopping and entertainment”, providing services such as delivery of meals, purchase of movie tickets, purchase of train tickets, online taxi services and hotel reservations.
This time, the “two choices” refers to the platform to take advantage of its dominant position and the dependence of some merchants on the platform to take improper means to force merchants to “choose one” between platforms, to restrict merchants to other platforms.
In a statement, Meituan responded, “The company will actively cooperate with the regulatory investigation, further improve business compliance management, protect the legitimate rights and interests of users and all parties, promote the long-term healthy development of the industry, and effectively fulfill its social responsibility.”
The statement also said that the company’s businesses are currently operating normally.
In March, the General Administration of Market Supervision also fined Meituan’s community group-buying business Meituan Youxuan 1.5 million yuan for “improper pricing practices”.
Zheng Wei, a partner at Beijing-based Anli Partners, said the regulator’s goal is to reduce the impact of dominant Internet companies on consumers, employees and smaller businesses.
He told Reuters, “The regulator aims to prevent Internet platforms from using their dominant position to exert influence on governance, including legislative and judicial proceedings.”
The Chinese government has frequently used anti-monopoly laws recently to restrain the rapid expansion of large Chinese companies, and Meituan appears to be the latest target of the crackdown, following companies like Alibaba.
In December last year, the General Administration of Market Supervision opened an investigation into Alibaba’s abuse of market dominance in the market for online retail platform services within China under the Anti-Monopoly Law. The bureau said that Alibaba had a dominant position after the investigation and that Alibaba’s implementation of “two-for-one” had “excluded and restricted competition in the online retail platform services market in China, hindered the free flow of goods and services and resource elements, affected the innovative development of the platform economy, infringed on the legitimate rights and interests of merchants in the platform, and harmed the interests of consumers. It also infringes on the legitimate rights and interests of merchants in the platform and harms the interests of consumers.
The General Administration of Market Supervision (GAM) issued an administrative penalty decision on April 10, ordering Alibaba Group to stop the illegal acts and imposing a fine of 18.228 billion yuan.
According to Reuters, three sources had said that Tencent founder Ma Huateng had met with officials from China’s antitrust regulator in March to discuss the company’s compliance issues.
The General Administration of Market Regulation also formally fined Tencent, Baidu and 12 other Chinese online companies involved in monopoly acquisitions 500,000 yuan each in March.
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