China’s Tech Antitrust Campaign Snares Meituan, a Food-Delivery Giant
China fined the food-delivery giant Meituan $530 million for antitrust violations on Friday, the second major penalty this year in Beijing’s efforts to bring the country’s big internet companies to heel.
The government’s campaign has been blessed by the highest levels of the Communist Party leadership. It has involved a wide cast of regulatory agencies and policymaking bodies. And it has wiped out hundreds of billions of dollars in wealth for shareholders of some of China’s — and the world’s — most successful tech businesses.
Like regulators and politicians in the United States and Europe, China’s leaders have watched with alarm as internet companies have gained ever-greater influence over commerce, society and everyday life. They want to ensure that these companies do not use their power to gain unfair advantages over rivals or exploit captive consumers.
But Beijing can move with a speed and decisiveness that Western officials can scarcely imagine, knocking down companies and industries with a few swift strokes.
China’s first big antitrust penalty against a tech company was imposed in April on Alibaba, the e-commerce titan co-founded by Jack Ma, one of the richest people in the world. The government’s market watchdog, the State Administration for Market Regulation, fined Alibaba $2.8 billion for preventing the merchants on its shopping sites from selling on other platforms.
That amount — a record fine for violating China’s antimonopoly law — represented 4 percent of Alibaba’s domestic sales in 2019.
The same agency announced shortly after that it was investigating reports of similar practices at Meituan.
After the market regulator announced its investigation, Meituan’s founder and chief executive, Wang Xing, told analysts that the company had reviewed its operations and barred the use of exclusive partnerships for restaurants and other merchants.
“We will fully respect merchants’ independent choices,” Mr. Wang said during an earnings call in May.
Meituan was founded in 2010 as a Groupon-like service for buying vouchers from local merchants. Mr. Wang had previously started and run two social media sites. More than 510 million people used Meituan’s platform last year to order takeout and groceries and book hotels and travel.
Albee Zhang contributed research.