Following in Ali’s footsteps, Meituan reportedly may face a $4.6 billion fine

According to institutional analysis, Meituan may face a 4.6 billion yuan fine.

Following Alibaba’s 18.2 billion yuan penalty, the Communist Party of China’s General Administration of Market Supervision announced on Monday that it has opened an investigation into alleged monopoly practices such as “two-for-one” by Chinese take-out platform Meituan.

Taiwan’s Technology News reported on April 28 that Morgan Stanley estimated that Meituan could be fined 4.6 billion yuan if the fine is based on 4% of the previous year’s sales, based on the previous anti-monopoly fine for Alibaba.

Under the Communist Party’s anti-monopoly law, Meituan could be fined up to 10% of revenue and as low as 1% once it is found to have violated the law.

Meituan shares opened 1.02 percent lower on Wednesday (April 28), dipping to HK$306.2, down 2.17 percent, at the beginning of the session, before the decline converged to close temporarily at HK$309.6, down 1.09 percent, at midday.

Bloomberg reports that the Chinese Communist government is now increasingly concerned about the growing influence of giants like Ali, Tencent and Meituan in every aspect of Chinese life, and the vast amount of data they have accumulated by offering services like online shopping, chatting and car-hailing.

After the Communist Party issued an astronomical fine to Alibaba, 34 platform companies, including Tencent, Jingdong, Byte Jump, Baidu and Meituan, were given a deadline to “rectify” the situation.

Bloomberg reports that the move signals that Beijing authorities have not yet settled the dust on their scrutiny of other domestic platform giants.

Chinese regulators said Internet platform companies should pay attention to the “warning effect of the Ali case” and reiterated the need to strictly prevent monopoly disorder and ensure fair competition in the market.

However, in the view of the foreign media, the CCP’s propaganda of “ensuring fair competition in the market” reflects precisely a double standard.

According to an editorial in the Financial Times on April 20, the CCP’s anti-monopoly penalty against Alibaba is not comparable to those in Western countries because the CCP uses a double standard in anti-monopoly, targeting only private or foreign enterprises, while ignoring state-owned enterprises that actually control a wide range of China’s economy.

According to an editorial in the British media, state capitalist beasts like the Chinese Communist Party’s SOEs have a monopoly in the Chinese market, not only suppressing China’s own competitors, but also impacting foreign multinationals, leaving many foreign companies entering the Chinese market in a difficult position.