Two landmark things here. As this RSF series continues, first, not merely Saudi Arabia is doing a check-and-balance for the upcoming completion of the deal between Uber and Germany’s Delivery Hero, but also Korea now. Second, why is Korea here, by the way? What’s their concern in relation to this deal? RSF has more.
South Korea’s anti-trust authorities meddle
The planned and proposed takeover of Uber by Delivery Hero is currently facing an anti-trust review in Korea, where the deal would also put the leading food delivery platform managed in the East Asian country under the same country as its biggest ridesharing services. Yes, there seems to be a conflict of interest in the first place.
Anti-trust reviews matter as they ensure that brand-new business undertakings would not adversely affect fair market competition, prevent monopolies, and stop anti-competitive practices, such as price-fixing, the worst of all.
Right now, Delivery Hero is operating in South Korea, through woowabrothers, which runs the country’s largest food delivery platform, Baedal Minjok. RSF previously reported this.
Also, should Uber take over Delivery Hero – there’s Uber Korea, right? You got it!
Earlier this week, South Korea’s Fair Trade Commission confirmed it had started a preliminary review of Uber’s proposed acquisition of Delivery Hero, a company that indirectly controls and manages woowabrothers, operator of Baedal Minjok, or Baemin.
This preliminary procedure would allow companies thinking of a merger or acquisition like this to seek the regulator’s assessment of potential competition concerns before making a formal filing. Once the transaction clears the preliminary review, another review – more formal this time – can proceed under a simplified process. Formality and due process are the middle names.
The expansion of Uber in Korea
So, right now, there’s nothing that Korea can do than to simply review things. It cannot block the planned acquisition now that it is already moving.
The closest thing that Korean authorities can hope for is that, this would mark a big, big expansion of Uber in Korea, now that there are new entities being added to its business portfolio. And, Uber Korea is big, not to overstate, or understate the fact.
Uber in Korea would have two worlds at their best in their hands. Acquiring Delivery Hero would also give it control of Baemin, the country’s largest food-delivery platform, putting ride-hailing and food delivery under a common corporate umbrella. Which makes sense why there are reviews like this being done. To avoid cartels and monopolies? Prooobably.
Furthermore, such integration would constitute combined memberships, promotions, and advertising. Regulators should do their job to avoid discrepancies, and over-the-fence maneuvers.
It was in 2017 when Uber launched its delivery arm, Uber Eats in Korea, but withdrew in 2019 after competitor Baemin overshadowed and overtook them. This planned acquisition would balance things out between these competitors. Uber had also previously considered joining with Naver, but Naver turned down the scheme. Naver is the super-app in Korea, from search engine to navigation.
Do you have some concerns on this matter? Talk to the ridesharing and food delivery community by creating and opening that account on RSF now! This is the newsroom for ridesharing, coupons, food deliveries, business, lifestyle, and so much more! Things are getting exciting! ‘Til then!