German Federal Cartel Office drops proceedings against Lieferando: Best price clause passes review for now
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The "Same Price Guarantee" from Lieferando
Subject of the review was the following provision in the General Terms and Conditions of the Lieferando parent company "JUST EAT Takeaway.com" for restaurants dated 08.02.2023:For the enforcement of the guarantee, the following is agreed under point 8.13. of the GTC:"The Equal Price Guarantee refers to your guarantee that the prices, discounts and special offers you offer in respect of the goods and services you offer on the Platform (including delivery charges and minimum order values set by you) will be the same as the prices for goods and services ordered through your own online channels. We require you to do this for commercial reasons and to ensure that the prices, discounts and special offers on the Platform are as competitive as those on your own online channels." (p. 2 of the GTC)
"During the duration of this agreement, you must apply the Equal Price Guarantee. If the Equal Price Guarantee is breached, the price difference will be equal to the price quoted on the platform and the price charged outside the platform:
i. the price charged to you by us; and
ii. the price refunded by us to the customer by presentation of a voucher.
You will promptly adjust the prices, discounts or other items on the Platform to match the corresponding items on your own website and menu. We may also adjust your prices, discounts or other items on the Platform to match the corresponding items on your own website and menu." (p. 9 of the GTC)
Concerns regarding dominant market position
The BKartA was concerned that the best price clause would inhibit the incentives to contract alternative delivery platforms at more favourable conditions. "In Germany, Lieferando is the heavyweight among the food delivery services, and it is suspected that the price parity clause significantly impedes restaurants," says Andreas Mundt, President of the FCO.For this reason, the FCO conducted intensive investigations in the present proceedings among competing companies as well as gastronomy associations in order to gain a sound understanding of the effect of the best price clause against the background of Lieferando's prevailing market position in Germany. A central result of these investigations is that the competitive dynamics in the food delivery industry are not exclusively determined by price factors, but in particular by differences in platform and service offerings. Currently, this market presents itself as quite dynamic due to the emergence of new providers that act as possible alternatives for restaurants. However, the future development of the market in Germany, even after the pandemic-related changes in consumer behaviour towards delivery services, remains difficult to predict at the moment.
Furthermore, the FCO critically examined Lieferando's practice of creating restaurant websites, especially with regard to the unwanted use of Lieferando's intermediary services by consumers (so-called "shadow websites"). However, the investigations could not provide convincing evidence for a pull effect in favour of the market leader presumed by the combination of a best price clause and shadow websites. In this context, the FCO points out that restaurants have the right to object to the creation of websites by Lieferando or to refrain from doing so altogether.
All in all, there are currently no sufficient indications that the clause constitutes a significant obstacle to the market entry of new platforms with alternative offers.
Comparison to the Booking.com case
The FCO has already taken action against a best price clause in an intermediary service: "Our prohibition of a similar clause used by the online hotel platform Booking.com has been confirmed by the court of the highest instance, the Federal Court of Justice," says Mundt. However, the market conditions for food delivery are currently different from those in the Booking.com case for hotel booking platforms, Mundt points out. "The market and the business models for ordering meals are currently very much in motion. According to our current investigations, restaurants are increasingly using alternative services which newly enter the market, and sometimes they are using several delivery services in parallel."Nature of best price clauses
Best price clauses often only appear superficially to be of benefit to consumers. By preventing more favourable prices on alternative distribution channels, they can, depending on the respective competitive conditions on the markets concerned, impair competition between rival providers of online intermediary services and make it more difficult for new platform operators to enter the market. Due to this fact, they are subject to special antitrust monitoring, especially in concentrated markets.For example, the FCO banned best price clauses in the areas of e-commerce and hotel reservation portals in the years 2013 to 2015. In various lawsuits, legal instances - the Düsseldorf Higher Regional Court in the case of HRS and the Federal Court of Justice in the case of Booking.com - have confirmed the bans of these clauses by the FCO.
Outlook
The provisional termination of the proceedings due to discretionary considerations does not mean that the FCO has finally assessed the admissibility of the inspected best price clause under cartel law. Rather, the FCO intends to continuously monitor the development of demand on the part of consumers as well as the competitive dynamics, especially in view of the market entry of Uber Eats and Wolt. If the market situation so requires or if complaints increase, the FCO reserves the right to review the conditions of competition and the contractual provisions at any time.Sources
Press release of the BKartA of 12.07.2023 on the termination of the proceedings against Lieferando (English)JUST EAT Takeaway.com T&Cs for restaurants dated 08.02.2023 (German only)