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Wednesday, 29 May 2019

ECA calls foul on Delivery Hero-Glovo “arrangement,” orders Glovo to come back to Egypt

ECA calls foul on Delivery Hero-Glovo “arrangement,” orders Glovo to come back to Egypt: The Egyptian Competition Authority (ECA) said an “arrangement” between Delivery Hero and Glovo to “divide up” markets” led Glovo to exit Egypt in violation of the competition law, the ECA said in a statement (pdf). The competition regulator has ordered Glovo to return to the country and to scrap its agreement with Delivery Hero within 30 days. “The concentration of market power with Delivery Hero could lead to practices that constrain competition and have a negative impact on all players in this market whether users, drivers or restaurants,” the ECA said.

Glovo has yet to be officially notified of the ECA’s decision, an unnamed company official tells Masrawy. According to the official, the company is currently in talks with the ECA over the potential consequences if it fails to comply with the order, including paying a fine.

Background: Spanish delivery startup Glovo, partially owned by Germany’s Delivery Hero, sent messages last month to its employees in Egypt informing them of the decision to indefinitely suspend its operations in Egypt following a EUR 150 mn series D funding. Glovo has also exited Chile, citing “some hefty financial losses” in 2018. The ECA’s intervention comes after it threatened both Uber and Careem with EGP 500 mn fines following their USD 3.1 bn merger in March.

Meanwhile, the ECA called in Huawei for a chat about the handset and network equipment maker’s recent woes, which have seen Google pull Huawei’s license to use the Android operating system. Ahram Online has the story.

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