Meituan fined 1.5 million yuan for selling goods below cost to squeeze out competitors

On March 11, 2021, the official website of the State Administration for Market Regulation announced the administrative penalty decision against Shenzhen Meituan Optimal Technology Co., Ltd. for its improper price conduct case.

The penalty decision enumerated Meituan’s preferred behavior to sell products below cost for the purpose of squeezing out competitors, and to use false or misleading price methods to lure consumers or other operators into dealing with them.

It was found that since October 2020, the parties involved in the sale of goods in Jinan City through “Meituan Optimal” have the following behaviors:

1. The act of selling goods below cost for the purpose of squeezing out competitors

The parties take the form of subsidies such as direct drop and event coupons to sell goods at prices below cost.

2. The act of using false or misleading price methods to lure consumers or other operators into trading with them

Meituan was Order to make corrections;

A fine of 1 million yuan for improper price conduct that violates Article 14 (2) of the Price Law of the People’s Republic of China and Article 4 (1) of the Administrative Penalties for Price Illegal Acts;

A fine of 500,000 yuan for improper price behavior that violates Article 14 (4) of the Price Law of the People’s Republic of China and Article 7 of the Administrative Penalties for Price Illegal Acts.

The above combined fine was 1.5 million yuan.

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