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Amazon investment in Deliveroo faces in-depth investigation

by ace
Deliveroo

Amazon's planned investment in Deliveroo, which includes a minority stake in online food mail, has come close to being potentially blocked by a UK regulator.

The Competition and Markets Authority (CMA) had given companies five days earlier this month to address concerns that the deal could lead customers and businesses to face higher prices and poorer services.

But the watchdog said in a statement issued Friday that it had received no compromises from the pair and would initiate the so-called second phase investigation.

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The CMA had already blocked a planned merger between Asda and Sainsbury's.

This investigation may take months and may ultimately recommend that the deal be blocked.

It was the result of a £ 450 million fundraiser from Deliveroo earlier this year that sought to expand into a fast-growing market alongside rivals like Just Eat and Uber Eats.

CMA's fears of tight competition also extend to the belief that Amazon, which closed its own Amazon Restaurants UK food delivery business in 2018, may be discouraged from entering the industry again on its own if investment is allowed.

Deliveroo argued that the partnership will strengthen competition.

A spokesman said: "Deliveroo has been working closely with the CMA and will continue to do so.

"We are confident that we will convince CMA of the facts that this minority investment will bring to competition, helping restaurants expand their businesses, creating more work for cyclists and increasing customer choice.

"Deliveroo is a British company operating nationwide and this investment will be particularly beneficial for the UK economy."

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