Better competition in the food ordering platforms market

Almost three years ago, the Norwegian Competition Authority adopted so-called remedies in the market for digital food ordering platforms. The remedies were binding on Foodora. The concerns regarded possible abuse of a dominant position. Foodora has been informed that the remedies will not be extended.

The remedies barred the use of exclusivity agreements and exclusionary practices by Foodora in their dealings with restaurants.

– During the period the remedies have been in effect, competition in the market for food ordering platforms has improved. In particular Foodora’s biggest competitor Wolt has grown significantly. After an overall assessment, the Competition Authority has found no basis for extension of the remedies. In any case, Foodora will still have to avoid exclusivity agreements if they harm competition in the market and consequently infringe the law, says Department Director Hanne Dahl Amundsen.

The background for the Competition Authority’s investigation in 2021 was the suspicion that Foodora had a dominant position in the market and had entered into exclusive agreements with restaurants they dealt with. This may be a violation of the Competition Act’s prohibition against abuse of a dominant position.

Exclusive agreements between dominant players and their customers are agreements that bind the customer to buy all or most of its needs from the dominant player.

The Competition Authority’s decision was intended to ensure that restaurants could enter into agreements with several food ordering platforms simultaneously.

Since the decision, Foodora has reported to a trustee on the implementation of the remedies in the decision. The trustee’s experience is that the remedies in the decision have worked well. Foodora no longer uses written exclusivity clauses, their standards for entering into agreements have been changed in accordance with the decision and their customers have been expressly made aware that they are not bound by exclusivity obligations. For the vast majority of customers of Foodora, it is the trustee’s impression that competitors have gained access and that this has subsequently lowered the barriers to entry into the market.

Wolt has grown significantly since January 2022. From being present in only six cities or locations in 2022, they are now present in over fifty cities or locations in Norway.

– Previously, there was one major player, both nationally and in most local markets. The markets are currently characterized by the presence of both Foodora and Wolt, and some smaller players. Foodora is the largest in some places, while Wolt in others. They are also evenly matched in a number of markets, says Senior Adviser Andrew Kenneth Essilfie.

The Norwegian Competition Authority will continue to monitor the market for digital food ordering platforms. Should restaurants, end customers or others suspect that Foodora, Wolt or any other market player is violating the competition rules, the NCA welcomes information on this.

The remedies in the decision will end on 17 January 2025.

Read more about the case from 2022: Vedtak mot Foodora: får ikke ha eksklusivavtaler med restauranter (In Norwegian).