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.
Investors are still waiting to learn the fate of another of China’s most-valuable internet companies, the ride-hailing giant Didi. Days after Didi listed its shares on the New York Stock Exchange in late June, Chinese regulators ordered the company to stop signing up new users and pulled its apps from mobile stores, citing cybersecurity and privacy concerns.
In a statement posted on Chinese social media, Meituan said it would accept the penalty “with sincerity” and “take this lesson to heart.”
China’s leader, Xi Jinping, has rattled the business world this year with a far-reaching campaign to strengthen state control over the economy. The Communist Party wants to curb business activity that it sees as inequitable or corrupt and to push entrepreneurs and tycoons to share more of their wealth with the rest of society.
Beijing’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.
Source: The New York Times