The Competition Commission of Pakistan on Wednesday announced to launch a probe against Foodpanda, an online food delivery platform, over alleged abuse of dominant position and violation of some other rules.
CCP will also investigate a possible violation of Sections 3 (Abuse of Dominant Position) and Section 4 (Prohibited Agreement) of the Competition Act, 2010, in the market of online food delivery platforms, according to a press release.
“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 the concerns highlighted by various market players,” read the statement.
CCP has initiated an enquiry against Foodpanda to investigate its alleged abuse of dominant position and a possible violation of Sections 3 and 4 (Prohibited Agreement) of the Competition Act, 2010, in the market of online food delivery platforms.#CCP #Pakistan pic.twitter.com/ep4aVmetLV
— Competition Commission of Pakistan (@CCP_Pakistan) July 7, 2021
The CCP has initiated the enquiry under Section 37 of the Act on the formal complaints filed by Foodpanda’s competitor, M/s Cheetay Logistics Pakistan Limited on 4 May 2021, and the All Pakistan Restaurant Association (APRA) on 10 June 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
Upon receiving the said complaints, 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 Pakistan.
Regarding the alleged abuse of dominant position, the concerns inter alia 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. Findings of the enquiry upon conclusion will be placed before the Commission for its decision.
CCP is mandated under the Competition Act to ensure free competition in all spheres of commercial and economic activity, to enhance economic efficiency and to protect consumers from anti-competitive behaviour including abuse of dominant position and prohibition of any such agreements that may distress the Competition.
