Concerns over EU antitrust violation prompt unannounced online food delivery premises probe

22 Nov 2023 --- The European Commission has carried out unannounced inspections at two companies active in the online food, groceries and consumer goods delivery sector within two member states. 

The move stems from concerns over practices violating EU antitrust rules that prohibit cartels and restrictive business practices, but the EC stresses the raids in no way signal any guilt or wrongdoing.

These latest inspections are not isolated events but follow a series of similar actions undertaken by the Commission in the previous year. Last year’s actions were linked to concerns over potential breaches of competition laws.

The European Commission said the ongoing raids happened in two EU countries and are related to those made last July, but did not name the companies that have been investigated, nor the countries.

German online food delivery company, Delivery Hero, is one of the company’s being investigated. 

In a statement sent to Food Ingredients First, a spokesperson for Delivery Hero says: “We can confirm that the European Commission has conducted an inspection at our offices in Berlin and Barcelona.”

“The fact that the Commission carries out such an inspection does not mean that the Commission has concluded that there has been an actual infringement of competition law nor does it prejudge the outcome. Delivery Hero is committed to cooperating fully with the Commission.”

The investigation signals the concern within the EU regarding potential anticompetitive practices in the online food delivery industry.Investigations extend beyond market allocations
In a statement, the EC says: “The scope of the investigation, initially including alleged market allocations, has now been extended to cover additional conduct in the form of alleged no-poach agreements and exchanges of commercially sensitive information.

“Unannounced inspections are a preliminary step toward investigating suspected anticompetitive practices. The fact that the Commission carries out such inspections does not mean that the companies are guilty of anti-competitive behavior nor does it prejudge the outcome of the investigation itself.”

The duration of these inquiries is not fixed and varies depending on factors such as case complexity, the extent of cooperation by the involved companies and the exercise of their rights of defense.

Digital landscape of food delivery
As online food ordering gains traction, platforms are intensifying their efforts to optimize business models and user experiences in the highly competitive European food delivery market.

The COVID-19 pandemic has boosted demand for food delivery in Europe, setting expectations for sustained growth and a future where home-delivered food is a significant part of total consumption.

This competition offers opportunities for food and beverage brands to expand digitally and reach a broader consumer base. Companies are adopting big data and AI analytics in the food and beverage industry to track and analyze market trends.

By Sichong Wang