Amazon and Deliveroo deal under scrutiny from competition watchdog

By Sophie Witts contact

- Last updated on GMT

Amazon and Deliveroo deal under scrutiny from competition watchdog

Related tags: Restaurant, delivery

The UK’s competition watchdog has launched a formal investigation in to Amazon’s investment in restaurant delivery platform Deliveroo.

The Competition and Markets Authority (CMA), which has the power to block deals if it believes consumers will have less choice, pressed pause on the tie-up in July​ while it considered if there were grounds for a further inquiry.

Amazon led a £450m funding round​ in Deliveroo in May, though its exact investment was not disclosed.

The CMA said it had “reasonable grounds for suspecting” that the deal could result in the two companies “[ceasing] to be distinct”.

It was speculated that Amazon was using Deliveroo to take on its tech rivals such as Uber after it shut down its in-house food delivery platform,​ Amazon Restaurants, in the UK after less than two years.

In a short update yesterday (16 October) the CMA confirmed it has decided to pursue an initial investigation in to whether the deal would lessen competition within the food delivery market.

If it rules this is the case the two firms can take action, or the CMA can decide to move forward with a second phase of the investigation that could lead to the tie-up being disallowed.

The deadline for the watchdog to announce whether to refer the merger to a phase two inquiry is 11 December.

Earlier this year the CMA put a stop to the merger between supermarket chains Sainsbury’s and Asda as it ruled it could impact the quality of products available to consumers.  

A spokesperson for Deliveroo says: “Deliveroo is cooperating fully with the CMA. This minority investment will help to create jobs, help restaurants to grow their businesses, improve choice for consumers and enhance competition in the UK food delivery sector.”

Amazon declined to comment. 

Related topics: Business & Legislation

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