CMA's decision on Just Eat, Hungryhouse merger
CMA has provisionally cleared Just Eat’s acquisition of Hungryhouse.
In a statement, Just Eat expressed that they are pleased that the CMA has provisionally concluded that the transaction does not lessen competition.
“We look forward to continuing to deploy our technology and expertise to help more independent restaurants develop and grow their businesses, while offering an even better service to consumers. We will continue to work with the CMA ahead of its publication of a final decision, expected in November,” the statement concluded.
Following CMA’s initial ruling, Preoday released its comments on the clearance. Preoday was the only company Just Eat indicated as a viable alternative to its business in its initial CMA response earlier this year: “...It has become increasingly cheaper for restaurants to offer their own online ordering interface (or use a third party to build their own – e.g. Preoday)...”
Comment from Andrew White, CEO of Preoday:
When the acquisition of Hungryhouse by Just Eat first emerged, our gut reaction was that it shouldn't be allowed to go ahead. To allow it would be to create a monopoly that would afford the company too much power within the market. In the year since then, the market has changed and Just Eat's future doesn't look as strong as it once did.
In the short term, I fear that with the CMA's ruling, thousands of British restaurants and takeaways could suffer. The fact remains that Just Eat is currently the UK's only online ordering and delivery aggregator with national reach, and it will now hold dominance over the national market. If it wants to up its prices, there are few alternatives, with the same sway, available.
In the long term, that dominance may be the opening door the market needs to welcome more choice. If restaurants find themselves backed into a corner with limited options, they will naturally seek alternatives. This then allows companies like Deliveroo and UberEATs to grow faster, and to create space for new market entrants.
So perhaps we can see this ruling as a good thing. True, our concerns for restaurants in the short-term remains, but I now believe this ruling could grant restaurants and takeaway more choice. I welcome the opportunity of choice.
