Singapore food delivery market headed to dangerous territory with exclusivity deals
Local competition watchdog says industry competitiveness is at risk.
While the local food delivery industry is steadily gaining traction right now thanks to exclusivity deals, Singapore competition regulators warn that such deals are slippery slope that could choke the industry.
According to an announcement by the Competition Commission of Singapore (CCS), CCS commenced an investigation of an an alleged anti-competitive practice by an unnamed online food delivery provider in Singapore.
"The investigation revealed that the online food delivery provider had entered into exclusive agreements with certain restaurants, which prevented the restaurants from using other providers’ services," stated CCS.
"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 added.
CCS noted that after it commenced the investigation, a delivery provider put the brakes on exclusive agreements with restaurants, though at the same time other providers have been taking advantage of such agreements to boost market share.
"In the event that the online food delivery provider becomes dominant, the presence of such exclusive agreements risks infringing competition law as it would affect the competitive state of the market. 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," shared CCS chief executive Toh Han Li.
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