Digital Transformation Ecommerce

China fines retail platform Meituan $533m for anti-competitive practices

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By Shawn Lim | Reporter, Asia Pacific

October 11, 2021 | 3 min read

Chinese on-demand shopping platform Meituan has been fined 3.44bn yuan (US$533m) by China for its anti-competitive “pick one from two” practice.

The platform has an exclusivity arrangement with merchants called “er xuan yi”, which means “choose one out of two“. The policy prevents small businesses from using its platform at the same time as any other retail site.

Why was Meituan fined?

  • Meituan was fined by China’s antitrust watchdog, the State Administration for Market Regulation (SAMR), for preventing businesses from selling their goods on rivals’ platforms like Alibaba’s Ele.me.

    delivery rider

    Retail delivery platform Meituan has been fined billions of yuan by China's anti-trust watchdog

  • The SAMR also ordered Meituan to refund exclusive cooperation deposits paid by merchants, totaling 1.29bn yuan.

  • “We accept the penalty with sincerity and are determined to ensure our compliance with the decision and its terms,” Meituan said in a statement.

  • Meituan will now need to submit a self-examination compliance report to SAMR for three consecutive years.

Why is this important?

  • China previously fined Alibaba around 18.2bn yuan ($2.8 bn) for the same offenses as Meituan.

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  • Like Meituan, Alibaba was required to revamp its platform operations and submit a “self-examination compliance report” by 2024.

  • China is also introducing guidelines for online platforms like Meituan and Ele.me to ensure food delivery riders earn above the country’s minimum wage, are free from unreasonable demands placed upon them by algorithms, and have access to social security and a place in a union.

  • The guidelines are designed to protect basic labor rights for riders, including a base income, work safety, food safety, a decent working environment, and access to insurance coverage.

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