Amazon’s bid to buy stake in food delivery firm Deliveroo is thrown into doubt as competition watchdog reveals ‘serious concerns’ and says in-depth probe may be needed
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Official watchdog fears deal could damage competition in online food delivery
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Deal could damage competition in emerging market for online grocery delivery
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Competition and Markets Authority says it raises ‘serious competition concerns’
Amazon’s attempts to buy a stake in food delivery firm Deliveroo were thrown into doubt today amid concerns that it raises ‘serious competition concerns’.
Britain’s competition regulator said the purchase of a minority shareholding in Deliveroo raises questions for consumers that may require an in-depth investigation.
California-based Amazon led a $575million (£437million) fundraising in Deliveroo in May, making what the two parties called ‘a minority investment’.
A cyclist working for food delivery platform Deliveroo is pictured in Cardiff in July last year
The move also saw the online giant go up against Uber Eats and Just Eat in the global race to dominate the market for takeaway meal deliveries.
After competing a ‘Phase 1’ probe, the Competition and Markets Authority (CMA) said it would proceed to a more in-depth investigation if Amazon and Deliveroo failed to offer legally-binding proposals that addressed its concerns.
The regulator fears the deal could damage competition in online restaurant food delivery by discouraging Amazon from re-entering the market in Britain.
The CMA is also worried that the deal could damage competition in the emerging market for online convenience grocery delivery.
Employees walk through a lobby at Amazon’s headquarters in Seattle in November last year
CMA executive director Andrea Gomes da Silva said: ‘Millions of people in the UK use online food platforms for takeaways, and more than ever are making use of similar services for the same-day delivery of groceries.
‘There are relatively few players in these markets, so we’re concerned that Amazon having this kind of influence over Deliveroo could dampen the emerging competition between the two businesses.
‘If the deal were to proceed in its current form, there’s a real risk that it could leave customers, restaurants and grocers facing higher prices and lower quality services as these markets develop.
‘This is because the significant competition which could otherwise exist between Amazon and Deliveroo would be reduced.’
The two companies now have five working days to offer legally-binding proposals to the CMA to address the competition concerns identified.