Meituan to be Fined $1 Billion for Suspected Monopolistic Market Behavior

Chinese antitrust regulators are considering to fine Meituan, the country’s largest online catering platform, about $1 billion for allegedly monopolistic behavior, the Wall Street Journal reported on Friday, citing sources familiar with the matter.

According to the sources, the fine may be announced in the next few weeks. Meituan will be required to improve its operations and end a specific practice known as “choosing one from the other,” that is, the firm taking advantage of its dominant position and using improper means to restrict merchants from trading normally with Meituan‘s competitor

Meituan responded to the news by affirming it would fully cooperate with the investigation and promised to abide by China’s Anti-Monopoly Law. The company reported that its revenue in 2020 was equivalent to $17.8 billion.

Since last year, many merchants have complained that the commission rate Meituan took was too high, forcing them to “choose one platform over the other.” Meituan in 2020 gained 58.6 billion yuan from commission, which has reached 1.8 times the total tax revenue of China’s catering industry in 2018, which has been likened to “Meituan Tax.”

On April 26 of this year, the State Administration for Market Regulation filed an investigation into suspected Meituan malpractice.

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Founded in Beijing in 2011, Meituan is China’s leading e-commerce platform for a wide range of services. It owns popular apps such as review platform Dianping and food delivery app Meituan Waimai. Its services span more than 200 categories including catering, food delivery, fresh-food retailing, ride-hailing, bike-sharing and entertainment, covering 2,800 counties and cities across China.