CNMC ends an investigation against the main food delivery platforms in Spain

The CNMC has finally decided not to open formal proceedings as it concluded that those exclusivity agreements were not likely to have a significant impact on the competitive ability of third-party competitors nor to restrict competition to a significant extent in the relevant markets.

1. Background of the investigation

Food delivery platforms offer intermediation services, connecting restaurants with consumers (with or without their own delivery service), and compete to offer restaurants the management of their food delivery orders and to provide them with a new advertising and marketing channel.

In this context, the above-mentioned investigation had its origin in June 2019, when Just Eat notified to the CNMC the acquisition of Canary Flash, a food delivery platform only active in the Canary Islands, according to the applicable national merger control rules.

Within such merger control procedure, the CNMC carried out a market analysis which revealed the entry of new operators in the market for food delivery through online platforms, - namely Deliveroo, Uber Eats and Glovo - that had in place exclusivity agreements with restaurants which could imply anticompetitive vertical restrictions. Consequently, the CNMC initiated an investigation in order to assess whether said vertical restrictions were able to have a significant effect on competition in the market and, in that case, to open formal proceedings against these companies.

According to the CNMC, the identified exclusivity clauses had the following characteristics:

• They were both explicit and implicit (i.e., despite not appearing expressly in the agreement, imply advantages for the restaurants, such as price reductions, investment in marketing campaigns, etc.);
• They entailed a reduction between 10% and 27% of the standard commission paid by the restaurants to the platforms for the services provided; and
• They had an average duration between 6 and 18 months.

2. CNMC’s assessment

In general terms, the European Vertical Block Exemption Regulation (“VBER”) exempts vertical restrictions provided that the parties involved do not have a market share over 30% and that they are not considered as “hardcore restrictions” (Art. 4 of the VBER). In this regard, the CNMC concluded that the exclusivity clauses were not covered by the exemption.

In the case at hand, the CNMC acknowledged that the investigated clauses qualified as non-compete clauses within the meaning of Art. 5.1.(a) of the VBER and para. 66 of the European Commission’s Guidelines on Vertical Restraints (“Vertical Guidelines”), given that the restaurants were prevented from using the services of competing food delivery platforms. Following these Guidelines, such clauses are exempted only if both parties have a market share of less than 30% and their duration do not exceed 5 years.

In this case, although only Glovo had a market share over 30% and the clauses had a maximum duration of 18 months, the CNMC applied Art. 6 of the VBER to conclude that the exclusivity clauses were not covered by the exemption in this case given that there are parallel networks of similar vertical restrictions covering more than 50% of a relevant market.

Notwithstanding the above, the CNMC has not found any evidence that the agreements in question were restricting competition in the relevant market -either individually or in view of their cumulative parallel effect- considering that:

• This was not a restriction of competition by object (the exclusivity clauses did not qualify as hardcore restrictions);
• The clauses had a limited duration of up to 18 months and the restaurants were free to abandon the clause without consequences;
• The number of restaurants adhering to exclusivity clauses was small (up to 35% for each platform); and
• The volume of the total market affected by the exclusivities was approximately 10%, which was –according to the CNMC– not relevant enough to consider that the practice analysed was likely to have an appreciable foreclosure effect based on the dynamism of the market.

3. Overview of online platforms and competition in Spain

The CNMC has put the spotlight on digital markets lately, by closely monitoring the activities of large technology companies and online platforms in Spain. In 2021, the CNMC has been particularly active in this regard as, among others, it examined a potential competition infringement of Google and the online restaurant book platform El Tenedor, and opened a formal investigation related to an alleged anti-competitive agreement between Amazon and Apple. In addition, the CNMC has recently published a report about the online advertising sector in which it carries out a detailed analysis the market competition conditions, with a stress on the “big tech” practices.

This is the first time that vertical relationships between online platforms and their clients comes under antitrust scrutiny in Spain, and further actions can be expected from the CNMC in the near future. This is even more relevant now that the European Commission is concluding the review process of the VBER and Vertical Guidelines and the new European rules on this matter are expected to come into force in a few months.

For further information, please refer to the CNMC’s decision here (in Spanish).

For more information, please contact Candela Sotes