Meituan, The Chinese Food Giant, Has Been Fined $534 Million For Antitrust Offences.

Key Sentence:

• Chinese regulators have fined food company Meituan 3.44 billion yuan ($534 million) for violating the country’s antitrust laws.

The state market regulator fined 3% of the company’s internal sales for 2020 for an antitrust practice known as “er Xuan yi,” meaning choosing one of the two. In 2018, the regulator imposed on Friday.

Meituan forces retailers to do business exclusively on its platform, requesting deposits and charging various interest rates, SAMR said. The regulator also asked companies to return 1.3 billion yuan in deposits to billed merchants to ensure they will not use competing platforms.

A company spokesman said Meituan would accept and accept the fine “with sincerity”.

“Meituan will take this lesson by heart, working following the law and making conscious efforts to ensure fair competition in the industry in which we operate,” the spokesperson said in an emailed statement. Ke Yang, head of research at Singapore-based DZT Research, said the numbers aligned with expectations. Chinese e-commerce giant Alibaba was fined a record $2.8 billion in April. Representing about 4% of its domestic sales for 2019.

However, it comes when companies face increasing losses from investing in new businesses, such as grocery delivery and community purchasing. Meituan said it lost 3.4 billion yuan for the quarter ended June 30. Its third straight quarterly loss, compared with a 2.2 billion yuan profit for the same period last year.

The company’s founder, billionaire Wang Xing, promised to improve its drivers’ working conditions. In July, the company was instructed to ensure that its workers receive wages above the minimum wage. Receive basic social security, and shorten delivery times. In addition, China has taken several regulatory steps against Meituan and others to tighten control over the country’s longstanding free internet sector. President Xi Jinping also plans to achieve “co-prosperity” by helping low-income people and narrowing the widening wealth gap.