The Egyptian Competition Authority (ECA) received binding commitments from Delivery Hero and Glovo to address the ECA’s concerns communicated to both parties on 22 May, 2019, according to a press statement on Tuesday.
The statement said, “Following the ECA’s decision regarding the anticompetitive practices of Delivery Hero –operating in Egypt through Otlob and Carriage–and Glovo, the ECA received binding commitments from both parties to address the ECA’s concerns and to comply with Egyptian Competition Law.”
The commitments offered are perceived satisfactory by the ECA and in compliance with the ECA’s board decision. Both parties are committed to comply with the ECA’s decision, in particular to restoring Glovo’s operations and reinstating its application and services relating to delivery of food and other services in Egypt.
Moreover, Delivery Hero shall not use its rights as a shareholder in Glovo to influence Glovo’s strategic decisions regarding operations in Egypt. Additionally, both parties are committed not to exchange confidential information regarding Glovo’s operations in Egypt.
The statement added that each party shall maintain independent operations in Egypt.
“Glovo announced the restoration of its operations in Egypt and reinstated its application and services in relation to food ordering and delivery, as well as delivery of other services which resulted in restoring effective competition in this market,” the statement read.
“The ECA’s intervention preserved at least 3,000 jobs and prevented the creation of a highly concentrated market in which consumers might have suffered from limited choices and prices above competitive levels. Ensuring the existence of effective competition is a key factor in attracting investments that contribute immensely to the economic development of Egypt.”
The ECA welcomes the return of an innovative market player as it recognises the role innovation plays in the digital market which can be duly maintained by the presence of effective competition that offers market players incentives to innovate. This is especially in digital markets that grow exponentially in Egypt, the statement elaborated.
Additionally, the ECA will continue to play its fundamental role in prohibiting anticompetitive practices in order to promote a free-market economy in Egypt and to ensure economic efficiency and consumer welfare.
