German online food delivery giant Delivery Hero is ending its exclusive deals with restaurants in Norway after reaching a settlement with the country’s competition authority.
The settlement stems from an investigation by the Norwegian authority into whether Delivery Hero’s service in the country, which operates under the Foodora brand, was anti-competitive.
He looked at the agreements Foodora had with restaurants that would see his service as their exclusive delivery partner, thus excluding other food delivery operators. The investigation was launched in February last year and no further sanctions were issued as part of this week’s findings.
Foodora is ending these exclusive agreements with restaurants, which will allow food companies to work freely with multiple operators. It also means the company can’t charge restaurants higher rates if it chooses to use multiple platforms. The decision will remain in effect for three years.
The authority said in a statement that the decision will ensure restaurants are free to choose whether they want to work with other food ordering platforms, which in turn will lead to better services for customers.
“Foodora Norway and the Norwegian Competition Authority have agreed that Foodora Norway will not use exclusive agreements for three years. This is the result of a process where the parties have been in dialogue since February 2021. Foodora Norway has started to walk away from exclusive deals before the NCA has contacted them,” a Delivery Hero spokesperson said.
The company did not comment on the status of exclusivity agreements in other markets.
The Norwegian authority stated that exclusivity agreements can fuel a company’s dominant position in the market. Delivery Hero is one of the biggest players in Europe and Foodora’s main competitors in Norway are Just Eat and Wolt.
A manager must be appointed to ensure that Foodora follows through on the decision, with the authority reserving the right to reopen the investigation if it does not.
Food delivery companies and the various pillars of their business model have come under scrutiny from different authorities, from monopolistic practices to the thorny issue of employment status.
In the United States, Uber Eats, Postmates and Grubhub have been sued for alleged monopolistic practices. Meanwhile, the EU is develop new rules it could change the status of millions of construction workers from contractors to employees.