China's top market regulator probes Meituan over alleged monopoly conduct
China's State Administration for Market Regulation (SAMR) has started an investigation into food delivery behemoth Meituan Dianping for alleged monopoly conduct including implementing an "exclusive dealing agreement."
"We will work in tandem with the regulatory authorities on the investigation, further raise the bar of compliance management, protect the legitimate rights and interests of users and all parties, so as to propel the long-term and healthy development of the industry and earnestly fulfill our social responsibilities," the company responded in a Monday statement.
All its businesses are still in working order, added the company.
Tencent-backed Meituan and Alibaba-acquired Ele.me, the largest players in the country's online food ordering and delivery market, have long been at odds as both of them leave no stone unturned to devour each other's realm.
In February this year, the Intermediate People's Court of Jinhua, east China's Zhejiang Province, ruled that Meituan's Jinhua branch had treated merchants in a targeted and discriminatory manner in that it forced merchants to "choose one from two" or "choose one from three."
The local SMAR branch found out that Meituan had sealed agreements with some merchants, under which merchants would be granted a 2-percent discount on commissions if they settled on the company as the sole online channel. Failure to abide by this agreement would push up the service fees to 6 percent.
Brushing aside the monopoly conduct, Meituan was also found to have coerced merchants to discard transactions with its competitors. If the company discovered its merchants were also using other food ordering platforms, it would shut down the merchant's Meituan account.
The court held that Meituan had restricted business freedom, which resulted in unfair competition as it resorted to approaches such as raising service fees and forcibly closing online stores.
The investigation follows the record $2.75 billion anti-monopoly fine imposed on Alibaba earlier this month for an "exclusive dealing agreement."
SAMR has earlier fined 12 companies, including internet giants Tencent and Baidu in March for violating anti-monopoly law in making deals.
China issued antitrust guidelines on the country's platform economy in February, signaling stricter antitrust enforcement against monopolistic behaviors in the country's internet platform sector.