Foodpanda and Deliveroo to modify exclusivity contracts with Hong Kong restaurants after competition probe
Hong Kong Free Press
Hong Kong’s two leading food delivery platforms, Foodpanda and Deliveroo, have agreed to amend their exclusivity terms after an investigation by the city’s competition watchdog found they could be harming competition.
The companies’ proposed amendments, published by the Competition Commission on Thursday, include the elimination of a provision that restricts partnering restaurants from collaborating with other platforms.
Foodpanda and Deliveroo offered to remove a requirement that restaurants maintained uniform pricing across different channels. Additionally, Foodpanda said it would scrap a mandate that made restaurants using its food delivery services to also use pickup services.
According to the commission’s statement, the commitments were made on a voluntary basis by Foodpanda and Deliveroo in return for the competition watchdog not continuing its investigation into whether the two platforms have hindered entry and expansion by new or smaller platforms or softened competition.
In its reply to HKFP, Deliveroo said it has been cooperating fully and constructively with the commission, adding that no final decisions had been made.
“This is a highly competitive and dynamic market and Deliveroo is committed to supporting all sides of our marketplace – our partner restaurants, riders and consumers,” Deliveroo said.
HKFP has also reached out to Foodpanda for comment.
The commission, which stated that it saw previous exclusivity terms enacted by the two platforms as potentially hindering entry and expansion by new or smaller platforms, said it considered the proposed commitments appropriate to address its concerns and therefore proposed to accept them.
A consultation period on whether the commission should accept the proposal would last until June 15, with the public invited to email, fax or mail their thoughts to the commission.
Both Foodpanda and Deliveroo have committed to revising their contracts and updating template agreements for future partner restaurants within a 90-day period after the proposed revisions are accepted.
Foodpanda, whose parent company is based in Berlin, launched its food delivery business in Hong Kong in 2014 while England’s Deliveroo launched its business in the region in
September 2015. They are the two major food delivery platforms in Hong Kong.
Apart from the two major food delivery platforms, other platforms which provide delivery services in Hong Kong include KeeTa, OpenRice, Oddle, 51wm, DimOrder and Shopper.
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