Meituan Faces Anti-monopoly Probe for Banning Alipay on Its Apps

Customers are prevented from using Alibaba’s Alipay to pay for services and goods on the Meituan and Meituan Dianping apps. (Source: KrAsia)

Meituan, China’s largest provider of on-demand online services from food-delivery to ride-hailing, is facing an anti-monopoly investigation for abusing its dominant position as the government steps up scrutiny of the country’s biggest tech companies.

The civil lawsuit was brought by a person surnamed Wang and has been accepted by the Beijing Intellectual Property Court, according to an official notice issued late October.

Beijing Sankuai Online Technology Co. and Beijing Sankuai Information Technology Co. were accused of abusing their dominant positions in the market by preventing customers from using Alibaba’s Alipay to pay for services and goods on their Meituan and Meituan Dianping apps.

In July, users who ordered delivery on Tencent-backed Meituan complained that it only accepted funds via its own payment platform, WeChat pay and Apple pay, forcing many to either open an account with WeChat pay or turn to other online takeaway platforms.

Following the lawsuit, some users said Alipay is now available as a payment method on the Meituan app, but the option is hidden in a drop-down button. It remains unavailable when tested on an iPhone 12, according to China Economic Weekly.

China’s anti-trust watchdog in November unveiled regulations that would seek to curb anti-competitive behavior such as compulsory collection of user data, price discrimination among customers, alliances that squeeze out smaller rivals and over-subsidizing services to eliminate competitors.

Meituan was one of six other internet firms including Alibaba, Tencent, JD.com and Pinduoduo that met with the State Administration of Market Regulation and the Ministry of Commerce last Tuesday to discuss a set of nine rules they need to follow.

On Sunday, regulators said they concluded a probe into Alibaba over alleged anti-competition practices, mainly its “choosing one from two” policy, in which merchants are forced to sell on Alibaba’s platforms exclusively and are prevented from selling on rival e-commerce platforms such as JD.com and Pinduoduo.

Two weeks ago, penalties were also issued to Alibaba, Tencent-backed China Literature and Hive Box for failing to declare deals to regulators. Regulators are also reviewing an impending Tencent-led merger of live-streaming platforms DouYu and Huya.

SEE ALSO: Alibaba Investment, China Literature and Hive Box Fined RMB 1.5M for Anti-Monopoly Violation

On Tuesday, president of ByteDance-owned Xigua Video (西瓜视频) Li Renfeng said China’s anti-monopoly rules can push the “healthy growth” of the video industry, pointing out that Tencent has used its market dominance to unfairly block Xigua Video links on WeChat, which has a user base of 1.2 billion people.

Other apps that have seen content or links blocked on WeChat include ByteDance’s DouYin (the Chinese version of TikTok), its collaboration platform Feishu (known as Lark overseas), Alibaba’s Taobao, and Pinduoduo.