The Fair Trade Commission (FTC) is to examine the impact of food delivery platform Uber Eats’ planned acquisition of Delivery Hero’s Foodpanda on market competition, particularly on changes in market share, the commission’s chair said on Thursday.
The FTC would primarily assess potential market share by analyzing the revenue, credit card receipts and number of deals of the domestic delivery platform giants, FTC Chair Lee May (李鎂) said after the agreement was announced.
Delivery Hero and Uber Eats have reached an agreement to sell its Foodpanda business in Taiwan to the latter for US$950 million, with the deal subject to regulatory approval, the company said on Tuesday last week.
Photo: CNA
“We will measure, with its major rival gone, the potential impact on [Uber Eats’] ability to [arbitrarily] raise prices, to work with other business operators [to pose a threat to market fairness] ... and to prevent other potential competitors from joining the market,” Lee said.
However, the result would not wholly hinge on whether the FTC regards Uber Eats as a monopolistic enterprise in the event of a successful merger, given that a monopoly can benefit the market under certain circumstances, the commission said.
The commission “holds a neutral attitude toward monopolistic structures” and would try to prevent a monopolistic enterprise from capitalizing on its market status rather than from coming into existence, FTC officials said.
It would also take into consideration the rights of those affected by the deal, such as restaurant operators and food delivery drivers, and hold public hearings to collect diverse opinions.
“We will then assess whether the overall economic pros brought by the merger outweigh the cons that come with limiting market competition before we make a final decision,” Lee added.
The FTC received Uber Eats’ acquisition request on Tuesday last week and is checking whether all necessary documents have been submitted before reviewing the merger, Lee said.
The case would be reviewed within 30 to 90 weekdays once the review starts, in accordance with the Fair Trade Act, he said
If the deal is passed, Uber Eats could have a market share of more than 80 percent in Taiwan, data compiled by the FTC in 2020 showed, which the commission pledged to re-examine.
The National Delivery Industrial Union hopes that Uber Eats would also take over the 140,000 delivery drivers hired by Foodpanda should the merger be approved, but no promises have been made, union advisor Su Po-hao (蘇柏豪) told the media on Tuesday last week.
Even if that wish is fulfilled, the deal might still leave local delivery drivers at the mercy of their new employer, as both companies have cut wages over the past few years, Su said.
Foodpanda and Uber Eats are far ahead of other competitors in terms of popularity in Taiwan.
A survey released in February by the Market Intelligence & Consulting Institute found that 73.6 percent of customers preferred foodpanda, 57.6 percent chose Uber Eats and no other competitor reached 10 percent.
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