German online food delivery giant Delivery Hero is ending its exclusive arrangements with restaurants in Norway after reaching a settlement with the country’s competition authority.
The settlement stems from a probe carried out by the Norwegian authority into whether Delivery Hero’s service in the country, which operates under the Foodora brand name, was anti-competitive.
It examined the arrangements that Foodora had with restaurants that would see its service being their exclusive delivery partner, thus shutting out other food delivery operators. The investigation was launched in February of last year and no other penalties were issued as part of the findings this week.
Foodora is ending these exclusive deals with restaurants, which will allow food businesses to work with multiple operators freely. It also means that the company cannot charge higher rates to restaurants if it chooses to use multiple platforms. The decision will remain in place for three years.
The authority said in a statement that the decision will ensure that restaurants are free to choose whether they want to work with other food ordering platforms, which will in turn lead to better services for customers.
“Foodora Norway and the Norwegian Competition Authority have agreed that Foodora Norway will not use exclusive arrangements for three years. This is the result of a process where the parties have been in dialogue since February 2021. Foodora Norway started its move away from exclusive agreements before the NCA contacted them,” a spokesperson for Delivery Hero said.
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The company had no comment on the status of exclusive agreements in other markets.
The Norwegian authority stated that exclusive arrangements can feed one company’s dominant position in the market. Delivery Hero is one of the biggest players in Europe and Foodora’s chief competitors in Norway include Just Eat and Wolt.
A manager is to be appointed to ensure Foodora follows through on the decision with the authority reserving the right to re-open the probe if it fails to do so.
Food delivery companies and the various pillars of their business model have come under the microscope of different authorities, whether it’s monopolistic practices or the thorny issue of employment status.
In the US, Uber Eats, Postmates and Grubhub have been sued over alleged monopoly practices. Meanwhile the EU is thrashing out new rules that could change the status of millions of gig workers from contractors to employees.