Back to the complete issue
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.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt; Hassan Allam Properties (tax ID:  553-096-567), one of Egypt’s most prominent and leading builders; and Saleh, Barsoum & Abdel Aziz (tax ID: 220-002-827), the leading audit, tax and accounting firm in Egypt.