UK Regulators Extend Hold On Amazon/Deliveroo Deal

UK's CMA Extends Hold On Amazon/Deliveroo Deal

Amazon is left cooling its heels again in its bid to buy a piece of Deliveroo, a top food delivery service in the United Kingdom.

Britain’s Competition and Markets Authority (CMA) on Wednesday (June 10) announced that it would push off for two months a decision on whether to let Amazon push forward with plans to buy a minority stake in the delivery service.

The CMA tentatively cleared the deal to move forward in April, noting at the time that Deliveroo faced financial peril amid the coronavirus crisis without Amazon’s promised injection of cash, having seen much of its business dry up with the closure of restaurants.

Amazon announced plans last May to invest $575 million in Deliveroo as part of a plan to take on Uber Eats and Just Eat Takeaway.

But the deal suddenly ground to a halt in December when the U.K. regulator announced it was launching an investigation into whether Amazon’s big investment in Deliveroo might have a chilling effect on competition in the food delivery sector – particularly by removing incentives on Amazon’s part to relaunch its own restaurant delivery service or take a larger role in the online grocery delivery sector.

“In taking this decision, the Inquiry Group had regard to the need to take full account of representations received from the Parties and third parties in response to the provisional findings and to reflect the impact of coronavirus (COVID-19) in its assessment,” said Stuart McIntosh, Inquiry Group chair, in a statement posted on the CMA website. “The Inquiry Group considers that completion of its investigation and the publication of its final report will not be possible within the original reference period.”

The British competition regulator has set a new deadline of August 6 for a decision on the Deliveroo deal. However, in its statement, the CMA said that it “aims to complete the inquiry as soon as possible and in advance of this date.”