CMA to launch competition probe into proposed Amazon investment into Deliveroo

  • CMA to launch competition probe into proposed Amazon investment into Deliveroo

CMA to launch competition probe into proposed Amazon investment into Deliveroo

The Competition and Markets Authority (CMA) has warned that Amazon's attempted acquisition of Deliveroo could leave convenience stores paying delivery firms higher prices for worse service. The regulator would have five business days to consider whether he accepts his offer instead of referring the case to an in-depth investigation.

The competitions watchdog is to launch an in-depth investigation into a planned investment by Amazon into Deliveroo amid claims that the USA retail giant could be planning to re-enter the food delivery market. It is part of a pattern of much more aggressive behaviour by the watchdog under new chairman Lord Tyrie.

In May, Deliveroo said it would use money from the Amazon-backed funding round to invest in its technology team at its London headquarters and to further expand its geographic reach and open more of its delivery-only kitchens.

The CMA said that wile there are some differences in the services that Amazon and Deliveroo offer to customers, the CMA found that competition between them could increase in future as the market develops.

A multimillion-pound investment by Amazon in the United Kingdom takeaway delivery firm Deliveroo could leave customers, restaurants and grocers facing higher prices and lower quality services, British regulators have said.

Andrea Gomes da Silva, CMA executive director, said: "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".

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

Under the current deal Amazon would be able to participate in management of the company, though it would not have full control of the business.

It announced a formal "phase 1" investigation in October, and on Wednesday confirmed it was proceeding with a "phase two" in-depth investigation.The CMA is anxious the deal may damage competition in two ways.The deal could prevent Amazon from re-entering the online food delivery market.

Deliveroo is a UK-based online food delivery company that was founded back in 2013. It now operates in two hundred cities. The regulator also considered whether Deliveroo data, such as customer orders from convenience stores and convenience store data, was likely to be passed to Amazon.

"Amazon believes that this investment funding will lead to more pro-consumer innovation", it added.

In April it blocked supermarket group Sainsbury's US$9.4 billion agreed takeover of Walmart owned rival Asda.