Food delivery monopoly ordered dismantled by the FTC

Motorcycles used to deliver food ordered on Yogiyo are parked in front of a restaurant in Seoul. [YONHAP]

It seems the food delivery monopoly has been thwarted, at least for now.

The Fair Trade Commission (FTC) Monday issued conditional approval for the acquisition of Baedal Minjok by Berlin’s Delivery Hero, but only if it sells off Yogiyo first.

If it follows the ruling, Delivery Hero will have under 60 percent of the market rather than the 90 percent it would control if it were to maintain ownership of Yogiyo.

December last year, Delivery Hero, which already owned Yogiyo and Baedal Tong, acquired Woowa Brothers, which controls Baedal Minjok. The deal was contingent upon FTC approval.

Restaurant owners and some lawmakers expressed concern the merger would allow the operator to monopolize the local market and raise delivery fees.

Delivery Hero immediately rejected the FTC’s decision and said it will work to persuade the regulator to allow for the combination.

No one was available at the FTC Monday afternoon to comment.

“Delivery Hero cannot agree with FTC’s decision. We will raise objections. We are confident that we can get the decision reversed,” the German operator in a statement said Monday.

“The proposal will undermine our goal to enhance the customer experience through the merger. It is also not helpful to anyone in the local community including restaurant owners, riders and customers.”

Once Delivery Hero submits its opinion to the FTC, the final decision will be made at the latest Dec. 9.

BY KANG JAE-EUN [kang.jaeeun@joongang.co.kr]