Chinese leading delivery platform business Meituan lost an unfair competition lawsuit launched by its competitor Alibaba’s Eleme, which is the second in 2021, as the government strengthens anti-trust law enforcement.
Beijing Sankuai Online Technology Co (Meituan) was ordered to pay 352,000 yuan ($53,820) as compensation to Shanghai Lazhasi Information Science Technology Co (Eleme) for unfair competition, according to a ruling by the Intermediate People’s Court of Huai’an, in East China’s Jiangsu Province, Chinese financial news site cls.cn reported on Wednesday.
In February, the Intermediate People’s Court of Jinhua, in East China’s Zhejiang Province, ruled that Meituan should compensate Eleme 1 million yuan for the unfair competition act of asking some merchants to reach an exclusive agreement with the platform.
The food delivery giant’s loss in the two cases came as China strengthens regulation of the platform economy with the pile-up of unhealthy business practices such as forcing merchants to “choose one from two platforms,” abuse of market dominance and use algorithm to charge more service fees on selected users.
On Saturday, the State Administration for Market Regulation announced a record $2.8 billion anti-trust fine on Alibaba, after an investigation concluded the e-commerce giant breached the country’s Anti-Monopoly Law which stipulates a business operator with a dominant market position is forbidden to restrict business competitors by requiring exclusive arrangements without any justifiable reason.
With Alibaba’s anti-trust case a wake-up call, the country’s other platform firms are asked to rectify their monopolistic actions.
In a statement released on Wednesday, Meituan said that it’s committed to promoting fair market practices and will not engage in unfair competition, illicit pricing and advertising.
Meituan will comply with the laws and regulations, and implement the platform’s legal responsibility and further improve its compliance system, it said.
The company will work to ensure the rights and interests of consumers, adding that it will not illegally collect and abuse individual information it has collected, and will protect users’ privacy in accordance with the laws and regulations.
Meituan deliverymen take a break on a road in Beijing. Photo: cnsphoto
