The Bangladesh Competition Commission (BCC) has slapped foodpanda with a Tk10 lakh fine for unfair market practices.
The BCC took the decision on Monday citing violations of sections 16(1) and 16(2) of the Competition Act and gave the online food and grocery delivery platform some directives to follow from now, BCC sources told Dhaka Tribune.
The fine came after a complaint by MGH Restaurants Pvt Ltd against Foodpanda in December 2020, alleging the abuse of its dominant position in the market and unfair practices in the food delivery sector.
In 2018, MGH Restaurants (Pvt) Limited and FoodPanda Bangladesh Limited agreed to use FoodPanda's online platform and services in exchange for a fixed commission rate and during the Covid-19 pandemic, as restaurant businesses suffered a sharp decline due to the nationwide lockdown, many restaurants began fighting for survival. FoodPanda Bangladesh Limited was then accused of abusing its dominance over the restaurants by threatening to increase commission rates or reduce the delivery radius.
The regulatory authority also prohibited Foodpanda from hindering restaurants from establishing partnerships with other delivery platforms.
The decision aimed to foster a more competitive marketplace while safeguarding the interests of both consumers and restaurants, the sources said.
Pradip Ranjan Chakraborty, chairperson of the commission, read out the summary of the order, mentioning that the BCC undoubtedly found Foodpanda to be holding the dominant position in the market.
He added that by abusing this dominant position, foodpanda had limited the business operations of Nando’s and Peyela, two popular restaurant brands of MGH Restaurants Pvt Ltd.
The BCC chair said it was a relatively new department and lacked manpower but was working to resolve all pending cases.
However, in a statement to the media, Foodpanda said that they are aware of the recent order passed by the Bangladesh Competition Commission and they have utmost respect for the law.
According to them, their position in the industry has not been adequately reflected in the order based on the facts presented, which they will review thoroughly and intend to appeal against this decision by due process of law.
They remain committed to the customers, partners and the food delivery ecosystem and dedicated to delivering quality services, fostering innovation, and contributing to the growth of the food delivery industry, the statement added.
Speaking to Dhaka Tribune, Foodpanda's Managing Director Ambareen Reza also echoed the same.
