An uproar in Taiwanese society followed soon after Uber Eats announced its intention to acquire Foodpanda. According to the data collected by the Taiwanese Fair Trade Commission ("FTC") in the past few years, these two food delivery platforms giants have a combined market share of nearly 75% or more in Taiwan. So, this potential merger has attracted so much attention ever since it came out in the end of May 2024. If the FTC gives the green light to this merger, the concern is always whether the market will be monopolized, thereby affecting the interests of consumers, stores, and food delivery workers ("couriers").

Taiwane's FTC started to review Uber Eat's merger in November 2024

On 14 November 2024, the FTC formally announced that Uber Eats's application with full required documents were submitted on 8 December 2024 to merge with Foodpanda, and FTC accepted to review this merger.  Generally, the FTC is supposed to return its decision within 30 working days, and in the meantime the merger shall not be concluded before such decision is made. However, on 9 December 2024, the FTC further announced that the review period will be extended for 60 working days in order to economically analyze the "the disadvantages of anti-competition" and "overall economic benefits". That being said, the FTC's final decision will come out no later than 21 March 2025. When four FTC's commissioners' terms of office will expire on 31 January 2025, including the Chair and Vice Chair of the FTC, it appears that FTC's decision will be made sooner than expected.  

Will the FTC assess the risks of labor sellers: the couriers?

Guideline 10 of the U.S. Merger Guidelines 2023 ("Guideline 10") stated that "when a merger involves competing buyers, the Agencies examine whether it may substantially lessen competition for workers, creators, suppliers, or other Providers". The well-known White Paper on Competition Policy in the Digital Economy published by the FTC did not elaborate its position on the labor market. Thus, in Uber Eat's meger case, the issue is whether the FTC will assess couriers' risks where the merger may substantially lessen competition for their labor. That is to say, will the FTC assess whether a merger between buyers of labor, such as Uber Eats and Foodpanda as employers, may substantially lessen competition or tend to create a monopoly? 

In this context, I have already launched an appeal to examine such an issue since the end of May 2024. In Uber Eats-Foodpanda merger case, it will be a merger of competing buyers in the labor market, which will substantially lessen competition when the competiton between merging buyers is actually eliminated. Referring to the Guideline 10, the FTC should consider whether Uber Eats-Foodpand's power is so strong to cut or freeze couriers' wages, slow their wage growth, exercise increased leverage in negotiations with the couriers, or in general degrade benefits and working conditions currently enjoyed by the couriers. 

The current analysis predicament is that the Fair Trade act aims to regulate "enterprises" other than "workers/labors". Theoretically, the Taiwan's Labor Standards Act other than the Taiwan's Fair Trade Act is used to protect the labors. The FTC also holds a position that laborers apparently do not fall into the scope of enterprise under the Taiwan's Fair Trade Act. More than that, Jhih-Ming Chen, Vice Chair of the FTC, also stated that "the reduction of wages is not an issue pertaining to the Fair Trade Act”when facing the Uber Eats-Foodpanda merger at the beginning stage.

Here, a possible solution is to make a difference between the "subject of regulations" and the "objectives of protection" under the Taiwan's Fair Trade Act. Although the Taiwan's Fair Trade Act regulates enterprises, its objectives of protection may not be limited to enterprises. For example, in cases of false advertising, many consumers who are not enterprises are still protected by the Taiwan's Fair Trade Act, and they have successfully won their claims against some vile manufacturers.

The overall economic benefits review

We can also look this case at this way. "Couriers' wages”and other demands on labor conditions not only involve the rights and interests of couriers, but also the overall development of delivery industries. If the FTC excludes "couriers' wages" and other demands on labor conditions from the scope of review of merger and acquisition, it may cause huge economic and social problems in the future. 

In Uber Eats-Foodpanda merger case, since the "disadvantages of anti-competition" is very obvious, the way to weigh on "overall economic benefits" becomes even more important. When the labor conditions and work environment for workers are material parts of the overall economy, it is reasonable to argue that these factors shall be covered by the FTC's merger review. 

This argument should not look very strange for the FTC. Just a few years ago, the FTC has factored labor market-related issues in its merger review between Cashbox Partyworld KTV and Holiday KTV, and stated that "concerns about reducing existing employment opportunities still cannot be eliminated when the applicant argued on integrating human resources through this merger.”The FTC concluded that this merger could not be accepted based on multiple reasons, including this employment opportunities factor, but hiding in the lines of the decisions.

Enterprises need to know short-term commitments will not be sufficient

After filing an application for merger, applicants may still undertake various future commitments so as to let the FTC take them into account in the merger review. If the FTC decides not to overrule the application for merger, it may probably turn those commitments into conditions or burdens to be placed on merging parties for approving this merger. The price issue is definitely the focus of public attention, and, in the past, there were also price undertakings made by the merging enterprises, but the FTC would not necessarily buy it. Why?

Take the merger case between Cashbox Partyworld KTV and Holiday KTV for example again, the merging enterprises promised not to increase prices or reduce any service and discounts provided to consumers for a period of five years. However, the FTC held that short-term commitments could not eliminate long-term concerns about anti-competition effects, so the FTC still banned the merger. From this point of view, even if an enterprise tries to eliminate doubts on price increases after the merger by "giving a promise not to raise prices", the FTC may still reject it when that promise is not a long-term deal in their eyes. Having said so, probably this article has already found a good way to argue for the Uber Eats-Foodpanda merger. Let's see whether Uber Eats will be able to give the FTC a promise with some long-term commitments that they cannot refuse.