Chinese regulators are taking an even closer look at Meituan, an app that lets users order a variety of services that include meal delivery as well as hotel, flight, taxi and restaurant bookings. On Monday (April 26), China officially announced in a press release that it is investigating the eCommerce giant.
Earlier this month, regulators met with representatives of the country’s top tech firms in China, including Meituan, Tencent Holdings, ByteDance and Jack Ma’s Alibaba. China is demanding that a variety of digital technology companies adhere to antitrust regulations. The government slapped Alibaba with record penalties this month.
All told, regulators have warned 34 top tech companies, including Meituan, that they have one09 month to set up anti-competitive practices and issue a public guarantee that they will adhere to regulations. The State Administration for Market Regulation (SAMR) announced that it had “filed investigations into Meituan’s ‘choice of two’ and other suspected monopolistic behaviors.”
In a news release, Meituan said it would “actively cooperate with the SAMR’s investigation and strictly implement relevant requirements.” The company added that business operations would continue in a normal fashion.
Bloomberg reported that the government is increasingly concerned about the growing involvement of tech companies like Alibaba, Tencent and Meituan in everyday Chinese life, along with the vast troves of information they have collected by providing services such as online shopping, chat services and ride-hailing.
Meituan has come under fire from competitors and merchants for its business practices. Bloomberg said the company — a rival of Alibaba’s Ele.me in the food delivery sector — has previously been found guilty of unfair competition in at least two legal cases this year and was ordered to pay compensation.
Earlier this month, Meituan said it was looking to raise $10 billion. The sale would involve 187 million shares of stock and $3 billion in zero-coupon convertible bonds, with Meituan also raising $400 million from shareholder Tencent Holdings. Meituan will reportedly use the revenue it generates from the sale to fund technological innovations.
Selected by EFXA