The Fair Trade Commission (FTC, 公平會) yesterday fined Foodpanda Taiwan Co (富胖達) NT$2 million (US$72,109) for unfair trade practices.
In contravention of the Fair Trade Act (公平法), the food delivery platform prohibited partner restaurants from charging different prices for dine-in and takeaway food, as well as banning them from providing their own delivery service or allowing customers to pick up their own orders, the commission said.
The company has been told to cease such practices immediately, it added.
“By taking away a restaurant’s ability to offer a price differential for takeout versus dine-in customers, Foodpanda infringed on the right of restaurants to control their own revenue structure,” FTC Vice Chairman Andy Chen (陳志民) said.
By stopping restaurants from offering lower prices for dine-in versus takeout meals, Foodpanda is “effectively forcing all customers to shoulder the cost of their commission,” Chen said.
Non-cooperating restaurants were punished by being dropped by Foodpanda or having their commission rates raised.
Furthermore, Foodpanda was giving consumers a discount for picking up their meals at the restaurant rather than having food delivered. However, it still charged restaurants the same commission, forcing restaurants to essentially undercut their own dine-in services, as the same meal would have been cheaper if ordered through Foodpanda.
Foodpanda’s practice of offering discounts on commissions for restaurants to cooperate with them exclusively was not judged improper, for the time being, the commission said.
However, the commission is keeping an eye out for network effects as Taiwan’s increasingly valuable meal delivery market consolidates.
The FTC warned market leaders Foodpanda and UberEats that it has noticed the increasing concentration of the Taiwanese meal delivery market.
As the big players gain market power, they could acquire an inappropriate amount of clout when dealing with partners and keeping out other competitors, it said.
“If the number of restaurants signing exclusive deals continues to expand, at some point the monopoly effect emerges,” it said. “If at some point the market becomes anti-competitive, it would be in contravention of the Fair Trade Act and the commission will investigate in accordance with the law.”
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