Chinese Meal App Meituan is Likely to Receive A Large Fine

0 27,538

The Chinese Meituan, the most significant meal delivery company in the world, will be fined the equivalent of 1 billion dollars if it is up to the Chinese competition authority.

 

The group allegedly abused its competitive position and thereby disadvantaged other companies, insiders reported to Bloomberg news agency. Business newspaper The Wall Street Journal also reports on the threat of punishment.

Meituan, which in addition to being a marketplace for millions of restaurants, also offers hotel bookings and grocery delivery, would have prevented companies from offering their goods and services on other platforms. The fine is expected to be announced in the coming weeks, and the fine amount is subject to change. Meituan would therefore have to adjust its activities and stop certain exclusive agreements with other providers on the platform.

Meituan did not yet want to comment on the possible fine. China’s competition watchdog announced the investigation in April, shortly after fellow internet giant Alibaba imposed a record fine of nearly $3 billion for similar monopoly practices.

Meituan was previously found guilty of unfair competition twice this year. The company already had to pay fines for this, local media reported. However, the company rejected previous allegations that it demanded hefty commissions from restaurants during last year’s coronavirus pandemic.

Other Chinese tech companies are also being tackled hard by the Chinese government, including taxi app Didi. Shortly after the company was listed on the US stock exchange, it was announced that the app would be under a cybersecurity investigation. Last month, the watchdog already drafted rules for Chinese meal deliverers to improve the conditions of employees. For example, delivery routes had to be adjusted. There were also reasonable delivery times.

Leave A Reply