CCP initiates probe against Foodpanda for discriminatory practices

CCP initiates probe against Foodpanda for discriminatory practices

ISLAMABAD: The Competition Commission of Pakistan (CCP) on Wednesday said it initiated a probe against the online food delivery service platform/aggregator, Foodpanda, to investigate its alleged abuse of dominant position and possible violation of prevailing laws, in the market of online food delivery platforms.

The CCP said that the enquiry committee will also review and place before the commission, its findings, whether the exemption granted (for loyalty agreements) to Foodpanda in April 2019 for the period of three years is impeding competition in any manner in light of concerns highlighted by various market players.

The CCP launched the investigation on the formal complaints filed by Foodpanda’s competitor M/s. Cheetay Logistics Pakistan Limited on May 04, 2021, and the All Pakistan Restaurant Association (APRA) on June 10, 2021. Formerly, a complaint was also filed by another online food aggregator, Careem Networks Pakistan (Private) Limited, pertaining to the exemption granted to same aggregator in 2019.

The CCP’s Cartel and Trade Abuse Department conducted a preliminary fact-finding exercise and found that Foodpanda seems to have a dominant position in the market of online food delivery platforms with a considerable amount of admitted volume of 100,000 per day food orders from different restaurants/outlets/food chains across the country. Regarding the alleged abuse of dominant position, the concerns include: charging exorbitant commissions; offering fidelity rebates; discriminatory practices; setting out various discounts to exploit participants; and entering into exclusivity with parties through loyalty agreements.

These concerns stretch the scope of abuse to being a barrier for the new entrants in the market of online food delivery platforms.

The enquiry committee has already been working on the case, consulting all the concerned parties and seeking relevant information for deliberating the matter objectively, the CCP said.

Findings of the enquiry upon conclusion will be placed before the commission for its decision.

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