By Yifan Wang

China has slapped Meituan with a 3.44 billion yuan ($533.6 million) fine for forcing merchants to sell exclusively on its platform, the latest step by Beijing in a year-long regulatory crackdown to rein in the country's powerful tech giants.

China's top market regulator, the State Administration for Market Regulation, said Friday that it has found Meituan to have violated anti-monopoly laws, following an investigation into the delivery firm since April.

The regulator said Meituan has abused its market dominance and forced merchants to sign exclusivity agreements by taking exclusivity deposits and adopting various punishment measures.

This business practice, known in China as "er xuan yi," or "choose one out of two," has been at the center of Beijing's regulatory actions against tech companies. In April, authorities fined Alibaba Group Holding Ltd. a record CNY18.2 billion for the same reason.

SAMR has ordered Meituan to return a total CNY1.29 billion of exclusivity deposits in full to merchants.

Meituan will also need to revamp its operations and submit compliance reports to the SAMR for the next three years, the regulator said.

Write to Yifan Wang at yifan.wang@wsj.com

(END) Dow Jones Newswires

10-08-21 0536ET