Amazon faces in-depth UK probe of food delivery deal with Deliveroo

by Editorial Team

British competition regulators launched an in-depth probe Friday into Amazon’s investment in the food delivery firm Deliveroo, raising questions about the deal’s future.

Amazon’s purchase of a minority stake in London-based Deliveroo warrants a deeper investigation because the companies did not outline any steps to make sure the deal won’t harm competition, the United Kingdom’s Competition and Markets Authority said.

“Amazon has failed to address our initial concerns that their investment in Deliveroo could be bad for customers, restaurants and grocers,” the authority said on Twitter.

The watchdog could block the deal or attach conditions to it if the “Phase 2” probe finds it will reduce competition.

Amazon led a $575 million fundraising round for Deliveroo that was announced in May. The deal aimed to give the American tech giant a stake in a major European competitor to food delivery companies such as Uber Eats.

The Competition and Markets Authority first raised concerns about the deal earlier this month, saying it would limit competition in a UK restaurant delivery market already dominated by just three companies including Deliveroo.

The deal would also combine two of the biggest players in the UK’s grocery delivery sector, regulators have said.

The authority referred the deal for a deeper probe after Amazon and Deliveroo failed to submit plans to address the concerns.

A Deliveroo spokesperson said the company is confident it will convince the watchdog that Amazon’s investment “will add to competition, helping restaurants to grow their businesses, creating more work for riders, and increasing choice for customers.”

“Amazon believes that this investment funding will lead to more pro-consumer innovation by helping Deliveroo continue to build its world-class service and remain competitive in the restaurant food delivery space,” an Amazon spokesperson said in a statement.

READ FROM SOURCE: https://nypost.com/2019/12/27/amazon-faces-in-depth-uk-probe-of-food-delivery-deal-with-deliveroo/

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