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Foodpanda Taiwan gets NT$2 million fine for imposing restrictions on restaurants

Food delivery platform must allow eateries to price delivered and dine-in products differently to reflect cost

Foodpanda Taiwan gets NT$2 million fine for imposing restrictions on restaurants

(CNA photo)

TAIPEI (Taiwan News) — Online food delivery platform Foodpanda has been issued a NT$2 million (US$72,226.94) fine for restricting restaurants to listing only the same prices as their in-store menus, and for denying restaurants the right to refuse pick-up orders, the Fair Trade Commission (FTC) announced in a press release on Friday (Sept. 17).

The FTC said that restaurants should be able to reflect the different costs of selling products to customers through various means, including dine-in, takeout, and online delivery systems. Customers may also decide the means by which products can be purchased, according to need.

By not allowing restaurants to list different prices on its platform, Foodpanda transfers the risk of losing delivery customers to indoor dining, due to being charged a commission fee by forcing dine-in patrons and delivery customers to share the extra price.

According to the FTC, Foodpanda also indirectly ensures that restaurants that use other delivery platforms do not list higher prices than on its own platform, even if other services charge lower commission fees. This denies consumers from enjoying the benefits other delivery platforms may offer, which is unfair competition.

Foodpanda also blocks restaurants from denying pick-up orders, which are generally made by returning customers, per the FTC. If restaurants must accept pick-up orders, not only do they not get to expand their market and welcome new customers, they must compete with themselves on the delivery platform and risk losing old customers to Foodpanda, a service for which they pay.

The company then provides incentives, such as discounts, for patrons to make pick-up orders, drawing more customers away while still receiving commission fees from restaurants, added the FTC. The FTC ordered Foodpanda to immediately stop such illegal practices in addition to issuing the hefty fine.

The FTC also warned Foodpanda and UberEats, the two dominant companies in the online food delivery industry, that exclusive deals to limit a new restaurant's development by stifling multi-homing (working with multiple delivery platforms), as well as other limitations, may also be deemed as unfair competition and illegal. The FTC said it will continue to monitor the market and intervene when it finds anti-competitive practices.

Updated : 2021-10-17 10:28 GMT+08:00