Chinese Food Delivery Gian Meituan Cleared In Anti-Monopoly Probe After Paying $533 Million Fine

Chinese Food Delivery Gian Meituan Cleared In Anti-Monopoly Probe After Paying $533 Million Fine

Beijing and the host of regulators handling the CCP’s crackdown on its biggest tech giants – which are being punished for exhibiting too many monopolistic tendencies, among other transgressions – came through with another major fine overnight. This time, the target was Meituan, and the fine handed down on Friday was surprisingly small: the firm was hit with a fine of 3.44 billion yuan ($533 million) over its alleged “monopolistic” practices. The fine – which was barely 1/6th the size of the $2.8 billion hit that Alibaba took (not to mention the additional $15 billion BABA has committed for China’s “common prosperity” initiative) will also likely be accompanied by more similar investors in ‘the community’.

While the anti-monopoly probe into Meituan – which began in April – might be officially “resolved” according to the Party, was said to be equivalent to about 3% of Meituan’s total domestic revenue of 114.7 billion yuan ($17.8 billion last year, per China’s State Administration for Market Regulation, China’s main antitrust watchdog.

In the latest news out of China to suggest its crackdown on big tech has finally reached its conclusion, Meituan’s fine was much smaller than anticipated, but China’s market regulator also ordered Meituan to refund exclusive cooperation deposits paid by merchants, totaling 1.29 billion yuan ($200MM).

The probe mainly focused on Meituan’s involvement in the anti-competitive industry standard known as “pick one of two”. Effectively, the biggest Chinese tech firms would sign on restaurants or other businesses to work with their service, but if those smaller business chose to also list on another platform, they would be booted off of Meituan.

“We accept the penalty with sincerity and are determined to ensure our compliance with the decision and its terms,” Meituan said in a statement.

Additionally, the company, founded by the 42-year-old billionaire Wang Xing, was previously urged to improve its workers’ working conditions, which have long been criticized as poor. In July, SAMR and six other government agencies ordered Meituan to pay its delivery riders more than the country’s minimum wage, and to release them from unreasonable demands made by the app’s algorithms.

That Meituan is back in Beijing’s good graces isn’t exactly a surprise. The first clue came when Wang was spotted at the CCP’s 100th-anniversary celebration last month, in what was seen as a sign that he was back in Beijing’s good graces, despite posting a after posting a 1,000-year-old Chinese poem that provoked a controversy after some said it was a criticism of the government. Wang insisted, however, that it was a criticism of his company culture and its need to improve.

Tyler Durden
Fri, 10/08/2021 – 07:18

Share DeepPol