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Anti-competition body to watch exclusive agreements between restaurants and delivery services

Thursday, August 25, 2016 - 11:03

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The Competition Commission of Singapore (CCS) said on Thursday it has investigated and found no harm for now in competition from exclusive agreements inked between restaurants and an unnamed online food delivery service.

THE Competition Commission of Singapore (CCS) said on Thursday it has investigated and found no harm for now in competition from exclusive agreements inked between restaurants and an unnamed online food delivery service. But it is closely monitoring the food delivery market, noting that such exclusive agreements can be "problematic" in future.

CCS said it had launched an investigation following complaints of an alleged anti-competitive practice by an online food delivery provider in Singapore.

"The investigation revealed that the online delivery food provider had entered into exclusive agreements with certain restaurants, which prevented the restaurants from using other providers' services," it said.

The anti-competition watchdog said after it commenced the investigation, a delivery provider stopped introducing exclusive agreements with restaurants, but at the same time other providers have been using such agreements to gain market share.

"CCS has ceased its investigation as competition has not been harmed. However, CCS will continue to closely monitor the market as such exclusive agreements can be problematic in future."

It said under the competition law in Singapore, businesses with a dominant market position are prohibited from preventing their competitors from competing effectively or shutting them out of the market through exclusive business practices such as exclusive agreements with their suppliers or customers. If such conduct is found to harm competition, CCS can take enforcement action.

"Instead of relying on exclusive business practices, businesses should compete on merit, leading to a more vibrant market with more choices for restaurants and consumers," said CCS chief executive Toh Han Li in a statement.

"We welcome feedback from restaurants and other industry stakeholders to help us assess developments and practices in this industry, including whether there are other restrictions that are impeding competition."

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