Foodpanda and Deliveroo amend provisions for restaurants to enjoy greater partnership freedom

The Competition Commission has accepted the commitments by Foodpanda and Deliveroo that they will amend their respective agreements with partnering restaurants so that restaurants can enjoy greater freedom in partnering with more than one online food delivery platform. 

Commitments offered by the two food delivery giants include amending provisions to allow restaurants to partner with new entrants and/or small platforms without losing the commercial incentives they are entitled to when working exclusively with Foodpanda or Deliveroo. 

The two giants also offered to amend provisions to make it easier for restaurants to switch from working exclusively with either one of them to also partnering with other online food delivery platforms. 

They will remove provisions that prevent restaurants from offering lower menu prices to consumers on their own direct channels and/or, in the case of Foodpanda only, on competing online platforms. 

Foodpanda also offered to remove provisions that require restaurants which use Foodpanda’s food delivery services to also use its order-to-pickup services. 

Under the commitments, the restaurants can also enjoy greater freedom in pricing menu items across their own channels and other platforms, the commission said on Friday. 

“Foodpanda and Deliveroo have offered to make the necessary amendments to existing agreements and communicate the changes to partnering restaurants within 90 days after the commitments enter into force,” the commission also said. 

Starting today, restaurants partnering with Foodpanda and Deliveroo are free to work with small food delivery platforms. 

The commission added that the online food delivery platform KeeTa operated by Meituan does not qualify as a small platform since its market shares at present exceeds 10 percent of the local online food delivery market. 

“As a result, the commitments do not prevent Foodpanda and Deliveroo from requiring their partnering restaurants to refrain from partnering with KeeTa if exclusivity has been agreed between Foodpanda or Deliveroo and their respective partnering restaurants,” the commission said. 

That means Foodpanda and Deliveroo can still ask their respective exclusive partner restaurants not to work with KeeTa. 

The commission’s CEO Rasul Butt said the advantages of accepting the commitments are threefold as restaurants can enjoy more flexibility in partnering with small platforms; new entrants and small platforms can partner with more restaurants and grow their network; and the customers will ultimately reap the benefits of increased competition between platforms.