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October 11, 2021

China imposes $533m fine on food delivery company Meituan

The company was involved in monopolistic practices and reportedly forced restaurants to sell their products through its app.

China’s State Administration for Market Regulation (SAMR) has imposed a penalty of $533m on food-delivery company Meituan for antitrust violations.

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The company was fined by the government watchdog after an investigation, where it was found to be involved in monopolistic practices, including forcing restaurants to sell their products exclusively through its app.

Meituan is also said to have used algorithms, deposits and agreements to ensure that restaurants remained faithful to the company.

Punitive measures were taken against restaurants that did not agree to Meituan’s terms, according to reporting by CNBC.

SAMR said that Meituan agreed to its faults and cooperated by providing evidence for the investigation officers.

It has also directed Meituan to correct its mistakes.

However, the fine imposed on the company was much lower than the $2.9bn fine imposed on the Chinese e-commerce company Alibaba after an anti-monopoly probe earlier in the year.

The Meituan fine is said to be only 3% of the revenue that the company generated last year.

Since last year, regulators in China have been making more frequent and tougher calls on some technology companies.

They are focusing on stringent rules to curb unfair competition and data protection.

An investigation was filed by the SAMR in April into the Meituan’s abuse of its dominant position in China’s online food-delivery market.

The filing was made in accordance with the Anti-Monopoly Law.

During the same month, Meituan raised close to $10bn through a stock and convertible bonds sale to invest in autonomous delivery vehicles, delivery drones and other advanced technologies.

Backed by Chinese multinational technology conglomerate Tencent, Meituan has a market valuation of $220bn.

Free Report
img

Meet emerging digital demand in the foodservice industry

Global digital pressures are making waves across sectors. The foodservice industry is seeing particular impact as consumers change the way they operate. It is therefore essential to know how to navigate the challenges that digital is presenting to the industry and its consumers. GlobalData’s free report explores the market outlook for the global foodservice industry, with insights into how foodservice operators, brands, and their suppliers can meet changing demands. Key features in this report include:
  • An overview of dine-in, takeaway, and delivery forecasts up to 2026
  • Areas foodservice industry players should be focusing on for digital investment
  • Consumer insight into attitudes towards digital convenience
  • Challenges facing foodservice, in terms of investment and logical considerations
  • Key examples of top industry players
Adapt and stay on top. Download our free report now.
by GlobalData
Enter your details here to receive your free Report.

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