The European Union (EU) imposed a total penalty surcharge of €329 million (approximately 500 billion won) on global food delivery corporation Delivery Hero on April 2 (local time). This action is taken due to its involvement in anti-competitive arrangements with its former competitor Glovo from July 2018 to July 2022.
According to reports from Reuters and the Financial Times, Delivery Hero agreed to mutual employment restrictions on key sector employees when it signed a minority equity acquisition agreement with Glovo in July 2018. It has since been understood that the agreement was expanded to a full employee poaching ban.
The agreement, known as 'no-poaching,' amounts to collusion between competitors, effectively preventing employee turnover. Thus, it is regarded as an unfair practice. This is the first time that a practice in the labor market has been recognized as collusion.
The EU Commission also determined that Delivery Hero's actions, along with Glovo, to essentially divide the markets they aimed to enter within Europe were illegal. The Commission imposed a total penalty surcharge of €329 million, with Delivery Hero and Glovo liable for €223.3 million (approximately 351 billion won) and €106 million (approximately 166.6 billion won), respectively.
The entire penalty surcharge must be paid by Delivery Hero. This is because Delivery Hero obtained sole control of Glovo as of July 2022, making them the same corporation. Particularly, both companies acknowledged violations of competition law and agreed to settle the case, resulting in a 10% reduction in the penalty surcharge, according to the Commission.
Meanwhile, Delivery Hero is a delivery platform operator based in Berlin, Germany. It operates various food delivery platforms in about 70 countries. In 2020, it acquired Woowa Brothers, the company that owns Baedal Minjok.