(Bloomberg) — China’s government has expanded its antitrust crackdown beyond Jack Ma’s technology empire, launching an investigation into suspected monopolistic practices by food-delivery behemoth Meituan.The State Administration for Market Regulation is looking into alleged abuses including forced exclusivity arrangements known as “pick one of two,” employing the same language in a probe into Ma’s Alibaba Group Holding Ltd. that ended with a $2.8 billion fine. China’s third largest internet company recouped early losses to rise as much as 3.1% Tuesday after Nomura analysts estimated Meituan may have to fork over just 4.6 billion yuan ($709 million) based on Alibaba’s punishment.The investigation into Meituan extends Beijing’s crackdown beyond Ma’s Alibaba Group Holding Ltd. and Ant Group Co., and threatens to chill the ambitions of founder Wang Xing, one of China’s most aggressive entrepreneurs. The government has become increasingly concerned over the growing influence of titans like Alibaba, Tencent Holdings Ltd. and Meituan over every aspect of Chinese life as well as the vast amounts of data they’ve amassed through providing services like online shopping, chatting and ride-hailing.The antitrust campaign has gathered pace in recent weeks, as regulators slapped a record fine on Alibaba, instructed affiliate Ant to overhaul its business and ordered 34 of its largest tech companies — including Meituan — to rectify any anti-competitive business practices within one month. Following the meeting with SAMR, the Beijing-based firm issued a pledge to abide by antitrust laws, saying it will maintain market order and won’t force merchants to “pick one of two” — forcing them to select betweens Meituan or a rival — through unreasonable methods.Meituan said in a Monday statement it will actively cooperate with the probe and step up efforts to comply with regulations.The pick one of two practice “helped play a big role in the early days of food delivery competition as it helped differentiate one’s restaurant supplies from those of competitors,” Nomura analysts Jialong Shi and Thomas Shen wrote in a research note. “Meituan’s strong market position and customers’ loyalty has enabled it to outgrow this.”What Bloomberg Intelligence Says:Meituan is unlikely to face penalties any harsher than Alibaba’s recent $2.8 billion fine after being slapped with a monopoly probe, a sign that the regulatory dragnet is widening on the country’s tech behemoths. The interim period could be unnerving for its investors, but we think any penalty Meituan may pay will be commensurate with its smaller operational scale.– Vey-Sern Ling and Tiffany Tam, analystsClick here for the researchIt remains uncertain whether regulators will target other aspects of the Chinese company.The firm, founded by 42-year old billionaire Wang, has long been criticized by rivals and merchants for alleged excesses like forced exclusive arrangements. The firm — which competes against Alibaba’s Ele.me in food delivery — had previously been found guilty of unfair competition in at least two legal cases this year and ordered to pay compensation, local media has reported. The corporation had also rejected allegations that it charged onerous commissions to restaurants during the Covid-19 outbreak last year.Alongside Ele.me, Meituan also faced an online backlash after several delivery riders were killed or injured while trying to meet strict deadlines. It was among a handful of operators fined by the antitrust watchdog in March for giving improper subsidies to expand in the red-hot arena of community e-commerce.“This latest news indicates that the enforcement of this antitrust regulation is much stricter and harsher than our original thought,” the Nomura analysts wrote.Ahead of the probe, Meituan said it will raise $10 billion in a record new share sale by a Hong Kong-listed firm as well as through an offering of convertible bonds. The firm had said it will use the funds to boost investments in new technologies like autonomous delivery as well as for general corporate purposes.Read more: Meituan CEO Who Beat Jack Ma Gets $10 Billion for Next Fight Under antitrust laws, Meituan could face a penalty of as much as 10% of its revenue if it’s found to have violated regulations. Its 2020 revenue was about 114.8 billion yuan ($17.7 billion). In contrast, rival Alibaba was fined $2.8 billion, or about 4% of its 2019 domestic revenues.Wang, a coding guru whose methodical obsession with data and algorithms proved instrumental in humbling Alibaba’s rival meal service Ele.me, has openly telegraphed his ambitions. In a 2017 interview with local media, he said Meituan could join Alibaba and Tencent as the third member of a Chinese internet triumvirate in five to 10 years, due to the value it creates in food, travel and other services.The billionaire last week described in a lengthy online post how he’ll funnel capital raised toward research into autonomous drones and delivery systems — which analysts expect to fuel Meituan’s foray into the red-hot community commerce arena, where buyers in a local neighborhood enjoy bulk discounts. Meituan had been expected to wage a pitched battle of subsidies and sweeteners with Alibaba, JD.com Inc. and Pinduoduo Inc. for food and produce supply.Meituan shares nearly tripled in 2020, making it one of the best-performing Chinese technology stocks. It’s dropped roughly 31% from a February record, partly as China’s antitrust campaign accelerated and after the company flagged that it will incur more losses from its investments in newer businesses like online groceries. Its dollar bond spreads widened Monday after the watchdog’s announcement.(Updates with share action and analyst’s comment from the second paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.