Blog: Dean BestUK regulator shines light on Amazon's Deliveroo investment

Dean Best | 5 July 2019

Amazon's move to invest in UK food-delivery business Deliveroo caught the eye when it was announced in May – but it's also attracted the attention of the country’s competition regulator.

The UK’s Competition and Markets Authority, or CMA, has filed what it calls an "initial enforcement order" on the two companies.

Under UK competition rules, such enforcement orders can be made when the CMA "has reasonable grounds for suspecting that it is, or may be, the case that two or more enterprises have ceased to be distinct, or that arrangements are in progress or in contemplation which, if carried into effect, will result in two or more enterprises ceasing to be distinct".

Companies can still be in contact but must ensure not to share any "commercially-sensitive information".

The regulator will now way up whether to start an investigation into any possible impact from the deal on competition.

In May, Amazon announced it was taking part in Deliveroo's latest fundraising round, which has seen the London-based firm attract US$575m. To date, Deliveroo, which operates in 14 countries in total, has raised $1.53bn.

Specific details were not disclosed but Amazon is the largest investor in the latest round. Deliveroo said this tranche of funding would be used to grow its reach and to invest in Deliveroo Editions, its delivery-only 'dark kitchens'.

In a statement on news of the enforcement order from the CMA, Amazon said: "We believe this minority investment will enable Deliveroo to expand its services, benefiting consumers through increased choice and creating new jobs as more restaurants gain access to the service."

Amazon has already tried to crack UK food delivery, launching its Amazon Restaurants business in the country in 2016 but closing it two years later (Amazon Restaurants still does business in the US).

Given Amazon does not operate a restaurant delivery business in the UK, it would be a surprise if the investment was blocked.

BLOG

Amazon tries again in UK food delivery

Perhaps today's most eye-catching corporate food story here in the UK is Amazon's decision to invest in food-delivery business Deliveroo....

BLOG

The heat is on at Hobnobs HQ

Andy Coyne visits snacks giant Pladis and hears about issues relating to football and sunny weather and learns of an admirable new initiative aimed at promoting positive mental health....



Forgot your password?