The Competition and Markets Authority (CMA) have provisionally cleared Just Eat’s takeover of Hungryhouse, stating that the deal will not lessen competition in the market.
Just Eat paid £200m for Hungryhouse in December last year, and is still awaiting final confirmation as to whether the takeover decision will be granted or not.
Prior to the decision today, the CMA decided to carry out a closer investigation into the merger, thinking it could be less beneficial for companies using a combined online platform rather than being given a choice of which website to use.
However, the decision today concluded that the takeover will offer more to customers by having both unique and chain restaurants on offer for online takeaway through a single online platform.
Martin Cave, Inquiry Chair at CMA, said: “We carefully assessed competition in this rapidly evolving industry to make sure this merger would not result in increased prices or reduced quality of offering for either restaurants or their customers. We obtained evidence from all the major industry participants and carried out surveys, with the public and restaurants, to understand how the merger could impact both types of customers.
“We found that Hungryhouse was a weak competitor to Just Eat and so competition is unlikely to be substantially reduced by this merger, especially given the entry and rapid expansion of innovative suppliers in this sector.”
Just Eat would take popular preference over Hungryhouse, offering more high street chain restaurants to order takeaways from. In comparison, Hungryhouse gives customers the choice from more unique brands.
Competition is more likely to come from companies such as Deliveroo or UberEATS, which are both a similar size brand compared with Just Eat, offering many of the same restaurants.
The CMA outlined that these companies “present a greater competitive challenge to Just Eat than Hungryhouse and this is likely to grow as they expand.”
Just Eat welcomed the decision from the CMA: “We look forward to continuing to deploy our technology and expertise to help more independent restaurants develop and grow their businesses, while offering an even better service to consumers.”
The online takeaway company expects to hear a final decision from the CMA by November.