The Egyptian Competition Authority (ECA) has taken an initiative to study the market for online food delivery in Egypt. This step comes as an afford to strengthen competition oversight in Egypt. ECA seeks to, with this investigation, assess whether the companies operating in this market and their practices comply with Egyptian competition law. ECA announced on Thursday, 26 May that it has discovered that a thus far unnamed company, enjoying a dominant position in the market, violated Egyptian competition law in three manners.
Restrictions on Dealing with Competitors
First, ECA found that the violating company has been forcing restaurants listed on their platform not to deal with its competitors. ECA found that through this action the violating company has not only enhanced its dominant position in the market but also threatened their competitors' chances of market survival.
Tying of Services
Second, ECA found that the violating company forced restaurants listed on their platform to use its delivery service. Pursuant to Egyptian competition law, companies enjoying a dominant position are restricted from such practices regardless of their impact on competition.
Nonetheless, ECA found that this action has harmed competition as contracting restaurants as it restricts them from delivering themselves or retaining other delivery service providers. Moreover, ECA determined that through this violation, the violating company did not only harmed competition in the online food delivery market but also restricted competition in the market for delivery riders in Egypt, which ECA considers a separate market
Price Alignment
Third, the violating company forced restaurants to align their prices overall and offer their offering uniformly at the same price regardless of outlet and platform. Thereby, they prevented competitive pricing and thus restricted competition in the market. ECA found this action to further increase the violating company's dominant position and harm competitors and consumers.
In response to these violations, ECA has taken administrative measures in order to ensure that competition in the market was restored. Additionally, as a means to rectify the violations, the violating company submitted a request for reconciliation. ECA has thus far not published the official decision. Therefore, it is still unclear which measures exactly ECA took and whether these were limited to behavioral orders or included other sanctions such as fines. We will keep you updated once we receive further information and clarification. If you have further questions, please feel free to contact us.
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