HK competition watchdog probes into foodpanda and Deliveroo biz

Hong Kong's Competition Commission is investigating delivery platforms Deliveroo and foodpanda for their possible breach of the Competition Ordinance. In a statement, the Competition Commission said it will examine whether the delivery platforms had required exclusivity from restaurants or induced restaurants to agree to exclusivity by including terms or conditions in their agreements with restaurants. The terms or conditions discourage restaurants from partnering with other online food delivery platforms.

The Competition Commission will also investigate whether the platforms had required restaurants to offer their menu items on the platform at prices that were equal to or lower than those offered on the restaurants’ menu, and/or on other online food delivery platforms. This may include the right for the platform to adjust prices offered by partner restaurants to achieve the same effect. In addition, the commission will delve into whether the platforms had required restaurants that hoped to acquire online food delivery services, to also acquire pick up or other services from them.

“The online food delivery industry has grown tremendously in Hong Kong in recent years and the food delivery platforms are playing a crucial role in the daily lives of Hong Kong people, particularly with the ongoing pandemic and the need for social distancing. Ensuring effective competition in the market to safeguard the interests of industry players and consumers as well as other relevant parties is therefore of utmost importance," said Rasul Butt, chief executive officer of the Competition Commission.

The commission said these requirements, if present, may have the potential effect of softening competition among online food delivery platforms, as well as hindering entry and expansion by new or smaller online food delivery platforms, depriving consumers and restaurants of the benefits of effective competition. Butt added, "We call on restaurants and other stakeholders to come forward and provide information which may help us assess practices in the industry, including whether there are restrictions that are harming competition.”

A spokesman of foodpanda said the company will proactively assist and cooperate with the relevant authorities on their information gathering, and it has no additional comments about the investigation.

Moreover, a spokesman of Deliveroo said, "We are cooperating fully (with the commission) and will continue to do so. We are transparent and responsive in our communication with the Hong Kong Competition Commission too. This is a highly competitive market and Deliveroo is committed to supporting all sides of our marketplace, including our merchant partners, riders and consumers."

Meanwhile, last year, Uber Eats Hong Kong ceased operation, switching its focus to its mobility platform in the city. On 30 November 2021, Uber Eats Hong Kong uploaded a brief statement on its website. It read, "After five years of partnering with restaurants and delivery people in Hong Kong, we have made the difficult decision to discontinue Uber Eats in Hong Kong on 31 December 2021. Our priority now is to support our employees, restaurant partners, delivery people and consumers in the transition. We couldn’t have built what we did without their trust and hard work, and we thank them for their support for the platform."

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