International

China fines food delivery company Meituan for monopolistic behavior

By AFP

BEIJING: China has fined food delivery company Meituan 3.4 billion yuan ($527 million) for monopolistic practices and ordered it to make “comprehensive reforms”, market watchdog said on Friday.

Authorities have launched a crackdown on a range of domestic tech giants – including Meituan, ride-hailing giant Didi Chuxing and e-commerce titan Alibaba – for alleged monopolistic behavior and aggressive harvesting of consumer data.

Meituan has come under fire since market regulators launched an investigation into the group in April, with special investigations into the working conditions of millions of its delivery drivers, who are often third-party contractors without legal protection or worker benefits. employed as.

On Friday, the State Administration of Market Regulation (SAMR) said in an online statement that an investigation had concluded that the group had “abused its dominant market position in China’s online food delivery platform market.”

It added that Meituan’s behavior “eliminates and restricts market competition … undermines the platform’s innovation power” and “harms the interests of consumers”.

The watchdog said the 3.4 billion RMB fine is equivalent to three percent of Meituan’s 2020 domestic sales.

It is the latest domestic technology to come under Beijing’s scrutiny.

E-commerce giant Alibaba was fined $2.78 billion by the markets regulator in April after a separate investigation said it was abusing its dominant market position.

Chinese authorities have ordered online food delivery platforms to guarantee basic labor protections for delivery riders, such as basic income above the minimum wage and access to insurance coverage.

Regulators in September ordered the ride-hailing arm of Meituan – along with ten other car platforms – to halt “disordered expansion” and “wicked competition” tactics.

Tech firms have been battered in recent months as Chinese regulators tighten the lease, citing data security and antitrust concerns.

Shares of Meituan fell 14 percent in July after new rules were issued to protect hard-pressed drivers and workers’ incomes were above the minimum wage level.

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