Amazon's deal with Deliveroo faces in-depth inquiry
0Reported today on The Guardian Technology
For the full article visit: https://www.theguardian.com/business/2019/dec/27/amazon-deliveroo-inquiry-regulator-london-food
Amazon's deal with Deliveroo faces in-depth inquiry
Regulator says US firm's £442m investment in London-based food courier could hit customers, restaurants and grocers
Amazon's UK ambitions have been checked by the competition watchdog after it launched an in-depth investigation into the online retailer's purchase of a stake in food delivery company Deliveroo.
The Competition and Markets Authority announced the probe on Friday after Amazon and Deliveroo declined to offer concessions in response to the CMA's initial raising of concerns earlier this month.
Amazon was the lead investor in a $575m (£442m) funding round, announced in May, which reportedly gave it a 16% stake in Deliveroo.
Deliveroo has been seeking investment to boost its performance against other deep-pocketed rivals such as Uber Eats, owned by the taxi app company Uber, and Just Eat, the FTSE 100 delivery platform that is the subject of a bidding war.
However, the CMA's decision to refer the transaction to a full investigation on Friday will cast doubt on whether the investment can go ahead. The regulator has the power to block the investment completely or demand specific remedies from the companies.
The CMA said the deal could leave customers, restaurants and grocers facing higher prices and lower-quality services. Amazon and Deliveroo had been given five days from 11 December to come up with changes but did not offer alterations to the deal. The CMA says it will conclude its investigation by 11 June 2020.
One of the main concerns was the impact on the incipient ultra-fast grocery delivery market. In the UK Deliveroo has been working on grocery deliveries within half an hour with convenience stores such as the Co-op, going up against Amazon's venture with Morri