Amazon’s Deliveroo tie-up in doubt amid competition concerns
ATTEMPTS by Amazon to buy a minority stake in food delivery business Deliveroo were thrown into doubt yesterday after the competition watchdog warned it could launch full-scale investigation into the move.
The Competition and Markets Authority (CMA), which has been investigating the deal since it was announced in May, said it had serious concerns competition could be stifled.
Andrea Gomes da Silva (above), executive director at the CMA, explained: “There’s a real risk that it (the deal) could leave customers, restaurants and grocers facing higher prices and lower quality services because the significant competiThe tion which could otherwise exist between Amazon and Deliveroo would be reduced.”
The CMA is concerned that the deal could discourage Amazon from re-entering the restaurant food delivery sector, having launched and closed its Amazon Restaurants business a year ago.
The watchdog said: “Although Amazon closed its restaurant delivery business, evidence examined in investigation indicated that Amazon has a strong continued interest in the restaurant delivery sector.”
It added there were fears the deal could damage competition in the fast-growing convenience store delivery market — several retailers have launched trials for ultra-fast delivery via Deliveroo and Uber Eats.
CMA said: “While there are some differences in the services that Amazon and Deliveroo offer to customers, the CMA found that competition between them could increase in future as the market develops.”
Amazon and Deliveroo announced that the US tech giant had led a $575m (£437m) funding round in May.
However, due to the companies’ sizes, the CMA launched an initial inquiry and then a phase one study.
Amazon and Deliveroo now have until December 18 to submit reasons why a phase two inquiry should not be launched.
The CMA is expected to make a final decision on the deal by the end of the year.
A spokesman for Deliveroo said: “Deliveroo has been working closely with the CMA and will continue to do so.”