Deliveroo and Foodpanda offer to amend exclusivity deals with Hong Kong restaurants after competition watchdog warns of possible legal breaches
- Competition Commission says top two food delivery platforms in city ‘have each offered to make necessary amendments to their existing agreements’
- Watchdog had warned both companies could hinder competition by penalising partnering eateries working with rivals and imposing platform price limits
The top two food delivery platforms in Hong Kong have offered to ease the terms of their contracts with restaurants so smaller rivals can build market share after the city’s competition watchdog warned the deals might breach the anti-monopoly law.
The Competition Commission on Thursday said Deliveroo and Foodpanda contracts contained potentially problematic provisions such as charging partnering restaurants lower commission rates if they worked exclusively with either company and penalising those that operated with rival platforms.
The two companies also required restaurants to stay within their platforms’ pricing limits, the independent statutory body said, warning that both had a degree of market power and could hinder new or smaller businesses from making inroads, as well as reduce competition.
But the commission said Deliveroo and Foodpanda had offered to amend their agreements with restaurants, ensuring venues would no longer lose out commercially if they worked with smaller platforms while also lifting pricing restrictions.
“Foodpanda and Deliveroo have each offered to make the necessary amendments to their existing agreements and communicate the changes to their respective partnering restaurants within 90 days after the commitments entered into force,” it added.
The proposal defined smaller platforms as those that did not currently have more than 10 per cent of the local market, covering companies such as Oddle, DimOrder and newcomer KeeTa, operated by mainland Chinese delivery giant Meituan.
The watchdog also invited interested parties to submit their views on the proposal before June 15, but did not elaborate on when it might approve the commitments after the consultation period ended.