ISLAMABAD: A senior representative at Pakistan's leading online food delivery service, Foodpanda, said on Thursday the company was "managing matters with the Competition Commission of Pakistan" and would not comment on the case at this time.
Earlier, the country’s anti-trust watchdog had announced it had launched a formal inquiry against the online service on charges of creating entry barriers for other organizations aspiring to penetrate the market.
“Yes, the Competition Commission of Pakistan [CCP] has initiated an enquiry against Foodpanda to investigate its alleged abuse of dominant position and possible violations of Sections 3 [Abuse of Dominant Position] and 4 [Prohibited Agreement] of the Competition Act, 2010, in the market of online food delivery platforms,” CCP Director General Media and Advocacy Asfandyar Khattak confirmed while speaking to Arab News.
“An inquiry committee has already started working on the case, consulting all concerned parties and seeking relevant information to objectively deliberate on the matter,” he added. “Findings of the inquiry upon its conclusion will be placed before the commission for its decision.”
The CCP is legally required to ensure free market competition in all commercial spheres to enhance economic efficiency and protect consumers from anti-competitive behavior.
According to an official statement issued by the commission, its inquiry committee would also review the impact of letting Foodpanda enter loyalty agreements for a period of three years by CCP officials in April 2019 and see if it impeded market competition in ways suggested by other market players.
Several other local organizations, such as Cheetay Logistics Pakistan Limited, All Pakistan Restaurants Association (APRA) and Careem Networks Pakistan (Private) Limited, have filed multiple complaints against Foodpanda and questioned the exemption granted to it by the CCP itself in 2019 from certain clauses of the anti-trust law.
“The complaint before the Competition Commission of Pakistan raises urgent and important issues that affect the market we operate and compete in,” said Maha Shah, Head of Public Relations and Social Impact Programs at Cheetay Logistics. “We trust that the CCP will conduct a fair investigation into the matter and are waiting for the inquiry committee to conclude its findings.”
The CCP said its Cartel and Trade Abuse Department conducted a preliminary fact-finding exercise after receiving the complaints and found that “Foodpanda seems to have a dominant position in the market of online food delivery platforms.”
The company receives about 100,000 food orders every day for different restaurants, outlets and food chains across Pakistan.
The complaints against it relate to the alleged abuse of dominant position by charging exorbitant commissions, offering fidelity rebates, indulging in discriminatory practices and entering in exclusivity agreements with parties through loyalty contracts.
“They [Foodpanda] have established their monopoly and do not allow restaurants to use other services,” Salman Aleem, Secretary General of the All Pakistan Restaurants Association, told Arab News.
Careem also welcomed the inquiry decision taken by the CCP while talking to Arab News.
“We are confident that the authorities will soon make a fair and conclusive decision that is based on best industry practices and benefits the entire [market] ecosystem,” Madiha Javed Qureshi, Director Communication at Careem, said.
In August 2019, Careem filed an application challenging the exemption granted by the CCP to Foodpanda, saying it was adversely affecting competition in the industry and creating barriers for new entrants.
“The CCP took notice of the matter which was followed by multiple hearings and submissions,” Qureshi informed. “However, nothing has materialized in the past two years.”