China has punished the largest company for greed

China has punished the largest company for greed

China’s antitrust authorities have decided to hit another giant — they will make the large food delivery service Meituan pay for greed. The company forbade trading firms to cooperate with competing platforms — the authorities considered it illegal, writes The Wall Street Journal.

Sources familiar with the matter said that the amount of the fine will be a billion dollars, and the authorities will make an official statement in the next couple of weeks. In addition, Meituan will have to seriously reconsider the principles of work.

Now the company operates under the slogan “choose one of two” — that is, firms whose products are delivered by Meituan cannot use the services of other similar services. It is most difficult for small businesses to survive in such conditions — with a decrease in the number of sites for placement, they lose a significant share of profits.

The Chinese antitrust authorities launched an against Meituan in April 2021. The company did not resist and pledged to help the investigation, as well as comply with the law. In the same month, Alibaba received a record fine for abusing its dominant position. The Chinese retail giant had to pay the antimonopoly agency $2.8 billion — four percent of the annual revenue in the domestic market. According to the legislation of the country, such a fine can be no more than ten percent.

And in June, the authorities of the country suspected the taxi aggregator Didi of antitrust violations. Concerns were caused by the “opaque” pricing policy.

Meiyuan is the largest food delivery service in China, through which you can also buy groceries and book hotels. In 2020, the company’s revenue amounted to $17.8 billion, and the market capitalization reached $170 billion. In terms of cost, Meituan is second only to the giants Alibaba Group and Tencent in China.

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