Sherpa’s fined $178,351 for monopoly behaviors in China in 2020
Published: Apr 12, 2021 04:43 PM
Screenshot of Sherpa's website

Screenshot of Sherpa's website

Popular Chinese-English bilingual online food delivery platform among expats in China, Sherpa's, was fined 1.16 million yuan (178,351) for monopoly behaviors, forcing partner restaurants to sign exclusivity agreements and stop cooperation with other platforms in 2020, Shanghai market watchdog announced on Monday. 

According to an announcement by the Shanghai Municipal Administration for Market Regulation, Shanghai Sherpa's Delivery & Service Co, which provides bilingual online food delivery services in Shanghai, Beijing and Suzhou in East China's Jiangsu Province, was found to have violated the antitrust laws that ban the abuse of dominant market positions by restricting partners from trading with others without justification. 

The market watchdog in Shanghai made an administrative punishment decision last December on the company with a penalty of 1.16 million yuan, 3 percent of its sales revenue in 2018. 

The company in an announcement on Monday said that it sincerely accepted the penalty, proactively cooperated in the authority's investigation, and took the initiative to rectify its work and completed rectification in November 2019. 

A PR specialist from the company surnamed Jiang told the Global Times on Monday that the company will detail plans to better cooperate with merchants on its platform. 

The market watchdog in Shanghai launched an investigation in June 2019 into the company. Between January 2017 and October 2019, the platform took advantage of its dominant position in Shanghai's English language online food and beverage delivery platform service market, forcing all its partner restaurants to sign an agreement with "exclusive provisions of delivery rights" and requiring restaurants to stop cooperation with other rival platforms. 

Those merchants who did not practice accordingly would be removed from the platform. 

According to the authority, the company locked a large number of cooperative restaurants in the relevant market, seriously weakened the competitiveness of competitors, and damaged the interests of merchants and consumers on the platform through its behaviors, eliminating and restricting competition without justification. Such behaviors violated China's Anti-monopoly Law that prohibits a company's abuse of their dominant market positions. 

Shanghai market regulator's announcement of the punishment came after the move of Chinese regulator to impose a fine of 18.23 billion yuan on Chinese e-commerce mammoth Alibaba for violating anti-monopoly laws, sending a clear policy signal that companies must ensure development and fairness of the online economy. 

The Shanghai market regulator expressed its resolution to strengthen the enforcement of anti-monopoly laws in the field of platform economy, further maintain market order with fair competition, create a sound legal and business environment, and promote the healthy and sustainable development of the platform economy under the direction of the State Administration for Market Regulation.
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