Competition authority opens abuse-of-market-power probe into Foodora

Austria’s Federal Competition Authority has opened an investigation into suspected abuse of market power in food delivery services, ORF reported Monday. The inquiry is expected to focus on market leader Foodora, although the authority has not named the company. It is examining restaurants’ dependence on delivery platforms, as well as potentially problematic contract clauses and penalties.

According to the authority’s findings, Foodora, formerly known as Mjam, holds between 50 and 60 percent of the Austrian market, while Lieferando accounts for about 40 to 50 percent. Foodora is particularly dominant in Vienna, while Lieferando leads in the rest of Austria. Wolt, which launched in Vienna in 2023, is gradually expanding, but the market has significant barriers to entry.

Delivery services have become a key sales channel for restaurants. Vienna businesses surveyed by the authority generated an average of 25 to 30 percent of their total revenue through online platforms.

“Digital platforms bring restaurants and customers together efficiently through innovative solutions and provide new momentum for the hospitality industry,” said BWB Director General Natalie Harsdorf. “However, problems arise when the market power of individual platforms becomes so entrenched that competitive balance is lost.” She said growing dependence on restaurants could negatively affect prices, the range of food available and the working conditions of delivery couriers.

The authority identified several potentially problematic practices during an investigation launched in March 2023, which included surveys of around 2,500 restaurants in Vienna. These included exclusivity agreements under which restaurants had to pause their presence on competing platforms to receive better contract terms. The authority also said the number of discount campaigns at Foodora rose sharply when Wolt entered the market.

The BWB is also examining strict best-price clauses that prevented restaurants from offering meals more cheaply through their own online channels. The authority questioned whether those clauses were economically necessary.

Restaurant operators also reported unilateral contract changes and penalties of up to EUR 10 for delays in food preparation. Around one-third of businesses complained about difficulties contacting the platforms. The BWB therefore submitted its findings to KommAustria for review under the European Union’s Digital Services Act.

The formal investigation could lead to court proceedings before the Cartel Court or be discontinued. The BWB stressed that the presumption of innocence applies.