Meituan under probe amid antitrust clamp

China’s State Administration for Market Regulation has launched an antitrust probe against Meituan, the latest target in a crackdown on the country’s sprawling internet platform economy.

The antitrust watchdog said in a statement it is looking into alleged abuses including forced exclusivity arrangements known as “pick one of two.”

Tencent-backed Meituan, which this month raised US$10 billion in a stock and convertible bonds sale, said in a statement it would cooperate with the investigation and that its business was operating normally.

This month, SAMR imposed a record US$2.75 billion fine on e-commerce giant Alibaba over the same practice and summoned 34 internet firms including Meituan to tell them to learn from Alibaba’s penalty and not use banned practices.

Meituan, which competes with Alibaba-backed online food delivery service platform among others, had an estimated 68.2 percent of China’s food delivery market in the second quarter of 2020, according to Trustdata. Meituan’s businesses include bike sharing, community group buying and restaurant reviews.

China has in recent months taken measures to rein in its once loosely-regulated internet economy in a clampdown backed by President Xi Jinping that has rattled the industry.

Beijing has become increasingly concerned over the growing influence of titans like Alibaba, Tencent, and Meituan over every aspect of Chinese life as well as the vast amounts of data they’ve amassed through providing services like online shopping, chatting and ride-hailing.

Zheng Wei, a partner with Beijing-based law firm Anli Partners, said regulators aimed to reduce the impact of dominant internet players on consumers, employees and smaller firms.

Reuters reported in April that SAMR was adding staff and other resources as China revamps its competition law with proposed amendments including a sharp increase in fines and expanded criteria for judging a company’s control of a market.

In March, Meituan was among five backers or owners of community group-buying platforms fined by SAMR over “improper pricing behaviour” related to subsidies.

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