Competition Commission of Pakistan launches probe against Foodpanda

KARACHI: The Competition Commission of Pakistan (CCP) has launched an inquiry against the online food delivery service platform/aggregator, Foodpanda, for its alleged abuse of dominant position and possible violation of the prevailing laws in the market of online food delivery platforms, a statement said on Wednesday.

The inquiry 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 the light of the concerns highlighted by various market players, it said.

The CCP launched the investigation on the formal complaints filed by Foodpanda’s competitor Cheetay Logistics Pakistan Limited on May 4, 2021, and the All Pakistan Restaurants Association (APRA) on June 10, 2021.

Earlier, a complaint was also filed by another online food aggregator, Careem Networks Pakistan (Private) Limited, pertaining to the exemption granted to the same aggregator in 2019, it said.

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/day food orders from various restaurants/outlets/food chains across the country.

Regarding the alleged abuse of dominant position, the concerns included charging exorbitant commissions; offering fidelity rebates; discriminatory practices; setting out various discounts to exploit participants; and entering into exclusivity with parties through loyalty agreements, the statement said.

These concerns stretch the scope of abuse to being a barrier for the new entrants in the market of online food delivery platforms, it said, adding that the inquiry committee had already been working on the case, consulting all the parties concerned and seeking relevant information for deliberating the matter objectively, the commission said.

The findings of the inquiry upon conclusion will be placed before the Competition Commission of Pakistan for its decision.

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