Foodpanda fined Tk10 lakh for unfair market practices

The Bangladesh Competition Commission (BCC) has fined online food delivery platform Foodpanda Bangladesh Tk 10 lakh for abusing its dominant position in the market.

The decision came as the commission gave its final verdict over a complaint filed three years ago by MGH Restaurants Pvt Ltd against the food delivery platform.

Pradip Ranjan Chakraborty, chairperson of the BCC, told The Daily Star that the verdict was declared on Monday.

During the commission's long-time investigation, it found that Foodpanda Bangladesh had abused its dominant position in the market, he said.

The crux of the complaint against Foodpanda centred on allegations that the company, capitalising on its market dominance, threatened to increase commission rates and reduce the delivery radius for its partners, including MGH Restaurants.

These actions, the complaint alleges, were contrary to the terms of the agreement signed between MGH Restaurants and Foodpanda Bangladesh back in 2018.

The complaint specifically cited sections 16(1) and 16(2) of the Competition Act 2012.

The regulatory authority not only imposed the fine but also issued some directives to Foodpanda.

One key directive prohibits Foodpanda from preventing restaurants from forming partnerships with other delivery platforms.

"Foodpanda is aware of the recent order passed by the BCC. We have utmost respect for the law of the land but it is our belief that Foodpanda's position in the industry has not been adequately reflected in the order based on the facts presented," Foodpanda Bangladesh said in an official statement.

"We are reviewing the order thoroughly and intend to appeal this decision in accordance with the due process of the law," it added.

"Foodpanda remains committed to our customers, partners and the food delivery ecosystem. We are dedicated to delivering quality services, fostering innovation, and contributing to the growth of the food delivery industry," it also said in the statement.

Foodpanda, a subsidiary of the Berlin-based Delivery Hero, operates in 11 countries.

Foodpanda's business in Bangladesh had boomed since the beginning of the Covid-19 pandemic as people were forced to move online to make purchases.

It went through a massive expansion by receiving abundant cash from Delivery Hero and started food delivery to all 64 districts of the country by the second week of December 2020.

It also launched a grocery shopping platform called Pandamart at the end of 2020.

In December 2013, Foodpanda Bangladesh started its journey with just 5 employees.