In brief
- Draft guideline on unfair trade practices for food delivery platform operators
- OTCC announced amendments to the Unfair Guideline for Franchise
OTCC has completed a public consultation on its draft guidelines on unfair trade practices for food delivery platform operators. Further amendments to the OTCC’s guidance for franchise businesses clarify details of “fair practice” if a franchisor wishes to open another franchise outlet in the same locality as existing franchisees.
This update was published on 16 October 2020 as part of our quarterly newsletter, Asia Pacific Competition Highlights. Click here to access the full report, which covers the most notable antitrust developments across 11 Asia Pacific jurisdictions.
Draft guideline on unfair trade practices for food delivery platform operators
The OTCC published a draft guideline on unfair trade practices for food delivery platform operators for a public hearing on 17 August 2020. The draft guideline is a subordinated legislation to the competition act, which is issued under section 57 (unfair trade practices). Section 57 applies to all businesses and does not require proof of market dominance. The draft guideline refers to the arrangements between a platform and its business partners e.g. restaurants and covers conduct like fixing an excessively high price, discriminatory practices, exclusive dealing, etc. The OTCC completed its public consultation on 15 September.
OTCC announced amendments to the Unfair Guideline for Franchise
The OTCC recently announced the amendments to its Guideline on Unfair Trade Practices for Franchise Business. The changes are mainly further aimed at clarifying the details of the “fair practice” if a franchisor wishes to open a new franchise outlet (or appoint the new franchisee to open the new franchise outlet) at the same locality as the outlet of the existing franchisee(s). Specifically, the amended guideline provides that:
- The franchisor must notify the existing franchisee(s) and allow such franchisee(s) to have the right of first refusal for the period of not less than 30 days.
- The said notice requirement does not apply if the franchisee(s) has been underperformed according to the clear criteria notified by the franchisor and such underperformance has already been notified to the franchisee(s).
