South Korea’s FTC Reviews Uber’s Proposed Delivery Hero Stake Acquisition

South Korea's antitrust watchdog said on Tuesday it has launched a preliminary review on Uber Technologies’s plan to acquire a stake in Germany-based Delivery Hero SE, the parent company of Woowa Brothers Corp., which operates the country's leading food delivery app. The Fair Trade Commission (FTC) said the U.S.-based Uber Technologies has submitted the application for a review regarding its plan to acquire a full stake in Delivery Heros. Woowa Brothers operates the delivery platform, Baedal Minjok, or Baemin.

Should the FTC give the deal the green light in its preliminary review, Uber is expected to file a formal application, reports Yonhap news agency. According to the FTC, Baemin had 23.4 million monthly active users in April, far above the 13.15 million recorded by No. 2 player Coupang Eats, which is operated by South Korean e-commerce giant Coupang Inc. The FTC said the takeover can be characterised as a conglomerate merger involving Uber's ride-hailing service and Delivery Hero's food delivery platform.

"If Uber takes control of Baemin, the country's leading food delivery platform, the company may expand advertising and promotional programs linking ride-hailing and delivery services, potentially leading to the integration of various services," the FTC said. The FTC said Uber has also sought to expand "cross-platform engagement" between its mobility and delivery services.

"The FTC will comprehensively review the proposed merger's impact on competition in South Korea's ride-hailing and food delivery app markets," the watchdog said, adding the review will be conducted in accordance with the standards and procedures stipulated under relevant laws. Uber launched its Uber Eats service in South Korea in 2017 but withdrew from Asia's No. 4 economy in 2019 amid Baemin's dominance of the local market, said the report.

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