United Kingdom competition watchdog to examine Amazon’s Deliveroo investment

Amazon and Deliveroo face investigation as deal put on hold

Amazon and Deliveroo face investigation as deal put on hold

UK WATCHDOG the Competition and Markets Authority (CMA) has put Amazon's potential tie-up with Deliveroo on ice.

The competition watchdog is investigating Amazon's investment in Deliveroo - a move that marked the online giant's renewed interest in the United Kingdom food delivery market.

In a statement given to the Guardian, a Deliveroo spokesperson said: "Deliveroo and Amazon have been working closely with regulators to obtain regulatory approvals".

Amazon says the expansion will benefit consumers by increasing choice and by "creating new jobs as more restaurants gain access to the service".

The Amazon led fundraising held in May was the company's move to enter into online meal delivery business.

In the document, the CMA said it had "reasonable grounds for suspecting that it is or may be the case that Amazon.com, Inc (Amazon) and Roofoods Ltd, trading as Deliveroo (Deliveroo), have ceased to be distinct; and/or that arrangements are in progress or in contemplation which, if carried into effect, will result in Amazon and Deliveroo ceasing to be distinct".

The regulator said it would probe the deal and could launch a full-blown merger inquiry if it believes that competition could be damaged. And the USA technology company does not now run any restaurant-delivery service, having closed down its offering in Britain in December and its American one last month.

The CMA served its initial enforcement order on 24 June and granted certain exclusions on 2 July.

If the CMA were to undertake an investigation and find competition concerns then the companies could offer undertakings to try to address those concerns. In addition, they can't transfer key staff or share any sensitive information with each other.

The food delivery sector is dominated by companies including GrubHub and Uber Eats.

Deliveroo now has 60,000 riders to deliver meals from more than 80,000 restaurants in 14 countries including Belgium, Italy, Ireland and the United Kingdom.

Since former lawmaker Andrew Tyrie became chairman of the CMA a year a go, it has increasingly bared its teeth.

Both of the businesses would be forced to maintain their current level of service in the United Kingdom and be prevented from making changes to big contracts or senior management without prior written permission from the CMA.

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