Amid stepped-up regulatory scrutiny of Big Tech firms in China, the country’s antitrust watchdog is reportedly getting ready to hit food delivery platform Meituan with an almost $1 billion financial penalty, The Wall Street Journal reported on Friday (Aug. 6).
The fine could be revealed in the weeks to come. Moreover, Meituan would have to change its business processes and put a stop to the “choose one out of two” practice, which is also known as “er xuan yi.” This practice, which entails exclusivity deals, has forced a number of small companies to choose sides in the nation’s hot retail sector.
Wang Xing established Meituan in 2010. Currently, he serves as the company’s CEO. Meituan has an approximately $170 billion market cap. Investors have poured billions into the company, which is said to be China’s third-most valued firm. Only Alibaba and Tencent are reportedly worth more.
The news comes as regulators in China are stepping up their scrutiny of Meituan. China officially announced in an April press release that it was looking into the eCommerce giant.
Earlier in April, regulators met with representatives of the nation’s leading tech firms, including Alibaba, ByteDance, Tencent Holdings and Meituan. The nation is demanding that different digital tech firms follow antitrust regulations.
The Chinese government is putting greater focus on antitrust investigations across an array of domestic technology companies, appearing in facilities without prior notice. The State Taxation Administration, the Cyberspace Administration of China and the State Administration for Market Regulation are said to be among the agencies involved.
At the time of some of the on-site visits, officials questioned high-level company officials and downloaded all kinds of records.