China Plans to Fine Meituan $1 Billion

China Plans to Fine Meituan $1 Billion
Source: 10.08.2021 365

The Chinese antitrust regulator is going to impose a fine of $1 billion on the Internet company Meituan, specializing in the delivery of food, goods and services through the network. With a market capitalization of about $170 billion, Meituan has attracted billions of dollars in investments and is the third largest public Internet company in China after Tencent Holdings Ltd. and Alibaba Group Holding Ltd.

The State Administration for Market Regulation of the People's Republic of China (SAMR) accuses Meituan of abusing its dominant position in the market, causing damage to other companies. To maintain its position in the market, Meituan will have to reconsider its activities. Before that, the largest was a fine against Alibaba Group in the amount of $2.8 billion, which brought down the price of the Internet giant's shares by 30% and significantly weakened its position on the stock market.

Experts of the BRICS International Center for Competition Law and Policy note that the concept of "social responsibility" plays an important role in China. The Chinese antitrust is characterized by a combination of financial and behavioral state interventions. Thus, after taking measures against Alibaba Group, a seminar for Internet companies was held in China, during which participants signed a public statement on compliance with legal norms.

Fines are one of the most common actions against violations of antimonopoly legislation. It is important to note that the fines should not exceed the company's profit. According to Chinese rules, antitrust penalties are limited to 10% of company’s annual sales.

Source: WSJ

antitrust  China 

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