(Yicai Global) Aug. 28 -- The Market Supervision Bureau in Jinhua, a city in China's eastern Zhejiang Province, has issued a CNY526,000 fine to Beijing Sankuai Online Technology Co.'s Meituan-Dianping, China's biggest group deal platform and leading food delivery firm, for illicit activities that adversely affected the ability of rivals to compete in the market, Legal Daily reported on Aug. 28.
As the clear market leader in Jinhua city, Meituan required merchants to sign an exclusive business agreement with the company, allowing them discounts in service prices. However, those that chose not to sign the agreement received inflated fees from the firm.
For take-out service customers, Meituan required merchants to only cooperate with itself and not with any of its rivals, thereby taking advantage of its dominant position in the market.
Meituan shut down services for merchants who had signed contracts with other similar take-out platforms such as the recently merged Ele.me, the food delivery company backed by China's e-commerce giant Alibaba Group Holding Ltd. [NYSE:BABA], in the second half of last year.
The State Administration of Industry and Commerce (SAIC) judged that Meituan's activities came under illicit competition.