Meituan, a giant in the Chinese meal delivery industry, has been fined about $533 million for anti-competitive practices. This penalty coincides with Beijing’s ongoing crackdown on its technology companies.
Chinese authorities have expanded their coordinated campaign of “rectification” to other areas, including tutoring, showbiz excess and video games. Initially, Beijing had focused on competition and personal data issues.
Initially pointing the finger at competition and privacy issues, Beijing has since expanded its “rectification” campaign to other areas like tutoring, entertainment excess or even video games.
According to the market regulator (SAMR), Meituan has been abusing its dominant position in China’s online meal delivery market since 2018.
The group supposedly has imposed exclusivity contracts, which prevent, for instance, restaurant owners from selling their products on competing platforms.
Meituan received a fine of 4.45 billion yuan ($535 million) for illegal practices under Chinese law, the regulator noted. These fines represent approximately 3% of Meituan’s turnover for last year.
Chinese authorities summoned Meituan and a dozen other start-ups earlier last month for a reminder about their business practices.
Targeted companies have until December 31 to comply with the regulator.
Meal delivery services are soaring in China
A fleet of scooter-riding deliverymen cross the country’s roads every lunchtime to satisfy millions of employees.
Chinese tech giants are dominating this soaring industry with smartphone apps and algorithms.
Companies are now required to offer delivery workers a wage above the legal minimum and reasonable work rates under new guidelines announced in July.
The measure follows several scandals highlighting the precarious working conditions of employees in the sector. Meituan stood out in particular.