Amazon asked to justify merger

Amazon has been asked to explain why buying a stake in Deliveroo will not reduce competition in the UK.

The Competition and Markets Authority (CMA) said yesterday it has launched a Phase One investigation into the deal.

If officials believe prices for customers could rise and competition reduce, a Phase Two inquiry will be launched in December.

Deliveroo and Amazon have refused to reveal details of the deal announced in May, beyond saying the latter had bought a minority stake as part of a £450 million fundraising round.

They have denied the deal will reduce competition in the online takeaway delivery sector and said it would allow Deliveroo to take advantage of Amazon’s tech prowess.

“Deliveroo is co-operating fully with the CMA”

In July, the CMA said both sides would need to remain separate while investigators decide whether a formal inquiry is necessary.

Deliveroo had been in discussions with Uber Eats, but these ended and Amazon made its approach.

Amazon tried to take on the two established rivals in the UK with its Amazon Restaurants service, but it was quietly closed down.

The CMA has the power to block any deal between Amazon and Deliveroo if officials deem it would create an unfair advantage and reduce consumer choice.

Its most recent highprofile ruling blocked the attempted merger of Sainsbury’s and Asda.

A spokesperson for Deliveroo said: “Deliveroo is cooperating fully with the CMA.”