HK competition watchdog cracks down on Keeta's exclusive restaurant deals

Keeta, a food delivery brand under Meituan, has reached a resolution with Hong Kong's competition watchdog, to amend its restaurant partner contracts. 

This follows the Competition Commission's observation that Keeta's agreements with partnering restaurants include provisions allowing for lower commission rates if they work exclusively with Keeta.

Moreover, partnering restaurants were restricted or penalised for switching from exclusive partnerships with Keeta to collaborating with other platforms, and they were prevented from offering lower menu prices on their own channels or competing platforms.

Given Keeta's likely market power in the online food delivery sector, the commission believes these provisions may hinder new or smaller platforms' entry and expansion, weakening competition. This ultimately deprives restaurants and consumers of the benefits of effective competition.

Following the commission's concerns, Keeta has agreed to amend its agreements with partnering restaurants in a two-step process. It will voluntarily revise the relevant terms in these agreements.

In parallel, Keeta will provide a commitment to the commission under section 60 of the Competition Ordinance, reflecting the substance of the voluntary amendments made in the first step.

Implementing the voluntary amendments will quickly amend or remove the relevant provisions, providing immediate benefits to both restaurants and customers. Additionally, the commission views the section 60 commitment as essential to ensure the amendments are legally binding and enforceable. A public consultation on Keeta’s proposed commitment will begin if the commission decides to accept it.

According to the commission, the amendments provide benefits such as greater flexibility for restaurants in partnering with new or smaller platforms and in setting menu prices across dine-in and delivery channels. This will also enable new entrants and small platforms to collaborate with more restaurants and expand their networks.

Ultimately, the commission believes that consumers will benefit from stronger competition between platforms, leading to more choices, improved services, and potentially lower menu prices.

MARKETING-INTERACTIVE has reached out to Keeta for a statement. 

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Back in December 2023, the commission accepted commitments from two online food delivery platforms, foodpanda Hong Kong and Deliveroo Hong Kong, leading to the amendment or removal of specific provisions in their agreements with partnering restaurants that may have harmed competition.

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