Amazon investment in Deliveroo 'should not have a negative impact on customers'

By Finn Scott-Delany

- Last updated on GMT

Amazon investment in Deliveroo 'should not have a negative impact on customers'

Related tags: Deliveroo, Competition and Markets Authority

Amazon’s investment in Deliveroo should be provisionally cleared because it is not expected to damage competition in either restaurant delivery or online convenience grocery delivery, the Competition and Markets Authority (CMA) has found.

This decision reflects the 16% shareholding in Deliveroo that Amazon is acquiring at the present time.

Were Amazon to acquire a greater level of control over Deliveroo, by making a full acquisition of the company, this could trigger a further investigation by the CMA, the regulator said.

Inquiry chair Stuart McIntosh said the impact of the coronavirus pandemic on Deliveroo had initially been extremely challenging, but not as severe as anticipated when initial provisional findings were published in April.

With the updated evidence no longer showing that Deliveroo would exit the market in the absence of the investment, the CMA has re-evaluated these initial provisional findings.

McIntosh said: “We’ve carefully considered how this investment could affect competition between the two businesses in future. Looking closely at the size of the shareholding and how it will affect Amazon’s incentives, as well as the competition that the businesses will continue to face in food delivery and convenience groceries, we’ve found that the investment should not have a negative impact on customers.”

The CMA is now asking for views on these provisional findings by 10 July 2020 and will assess all evidence provided before making a final decision.

The statutory deadline for the CMA’s final report is 6 August 2020.

Related topics: Business & Legislation

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