EU Fines 'Baemin Parent Company' Delivery Hero 500 Billion Won

Agreement to Refrain from "Poaching" Prior to Glovo Acquisition

The European Union (EU) on June 2 (local time) imposed a total fine of 329 million euros (approximately 500 billion won) on the global food delivery company Delivery Hero.

According to the European Commission, Delivery Hero violated EU competition law by establishing an "anti-competitive cooperation scheme" with its then-competitor Glovo from July 2018 to July 2022.

Delivery Hero entered into a minority stake acquisition agreement with Glovo in July 2018 and, at that time, agreed to mutually restrict the hiring of key employees. This agreement was later expanded into a comprehensive no-poaching agreement. Such agreements, also known as "no-poaching," are considered unfair practices because they effectively prevent workers from moving between competitors through collusion.

This is the first time that a practice in the labor market has been recognized as collusion. The European Commission also explained that Delivery Hero and Glovo's actions to effectively "divide up" the markets they sought to enter within Europe were illegal.

The Commission imposed the total fine of 329 million euros by splitting it between Delivery Hero and Glovo, with 223.3 million euros and 106 million euros, respectively. As of July 2022, Delivery Hero secured sole control of Glovo, and the two companies are now one entity. The Commission explained that both companies admitted to the violation of competition law and agreed to settle the case, resulting in a 10% reduction in the fine.

Headquartered in Berlin, Germany, Delivery Hero operates multiple food delivery platforms in over 70 countries. In 2020, it acquired Woowa Brothers, the owner of Baemin.