File photo shows Meituan delivery personnel packaging the food in Jinan, capital city of east China's Shandong Province. (Xinhua/Guo Xulei)
BEIJING, Oct. 8 (Xinhua) -- China's top market watchdog on Friday fined the internet giant Meituan 3.442 billion yuan (about 533 million U.S. dollars) for abusing its dominant market position in the country's online food delivery platform market and ordered the company to "comprehensively rectify" its operations.
The fine is equal to about 3 percent of the Meituan's total domestic sales revenue of 114.7 billion yuan in 2020, according to China's State Administration for Market Regulation (SAMR) in an online statement.
China's market watchdog began investigating the case in April this year, and found that, since 2018, Meituan had abused its market position in domestic food delivery services, forcing merchants to sign exclusive cooperation agreements.
The company was also found to have taken multiple punitive measures, including charging merchant deposits and employing technological tactics involving data and algorithms, pressuring those merchants to "pick one out of two" to exclude competitors and limit market competition.
Those behaviors have weakened the innovative dynamics and vitality of the platform, and harmed the interests of the platform merchants and consumers, said the SAMR.
The market watchdog has ordered Meituan to stop illegal activities, return nearly 1.29 billion yuan in deposits paid by merchants to cooperate exclusively with the company's food ordering and delivery platform.
Meituan has also been ordered to comprehensively rectify its misconduct, including improving the commission charging mechanism and algorithm rules, safeguarding the legitimate interests of small and medium-sized catering businesses on the platform, and strengthening the protection of the lawful rights and interests of the delivery personnel.
The company should submit reports on the improvements in its practices over the next three years and accomplish regulated, innovative, healthy and sustainable development, according to the SAMR.