China broadens its antitrust crackdown with Meituan probe

Bloomberg

China’s government has expanded its antitrust crackdown beyond Jack Ma’s technology empire, launching an investigation into suspected monopolistic practices by food-delivery behemoth Meituan.
The State Administration for Market Regulation (SAMR) announced the investigation, which began recently, in a statement. The antitrust watchdog is looking into alleged abuses including forced exclusivity arrangements known as “pick one of two.” The company said it will actively cooperate with the probe and step up efforts to comply with regulations. Its businesses are currently operating normally, it added.
The firm’s dollar bond spreads widened. The investigation into Meituan extends Beijing’s crackdown beyond Ma’s Alibaba Group Holding Ltd and Ant Group Co, and threatens to chill the ambitions of founder Wang Xing, one of China’s most aggressive entrepreneurs.
The government has become increasingly concerned over the growing influence of titans like Alibaba, Tencent Holdings Ltd and Meituan over every aspect of Chinese life as well as the vast amounts of data they’ve amassed through providing services like online shopping, chatting and ride-hailing.
The antitrust campaign has gathered pace in recent weeks, as regulators slapped a record fine on Alibaba, instructed affiliate Ant to overhaul its business and ordered 34 of its largest tech companies — including Meituan — to rectify any anti-competitive business practices within one month.
The firm, founded by 42-year old billionaire Wang, has long been criticised by rivals
and merchants for alleged excesses like forced exclusive arrangements.
Ahead of the probe, Meituan said it will raise $10 billion in a record new share sale by a Hong Kong-listed firm as well as through an offering of convertible bonds.
Under antitrust laws, Meituan could face a penalty of as much as 10% of its revenue if it’s found to have violated regulations. Its 2020 revenue was about 114.8 billion yuan ($17.7 billion).