The United Kingdom’s regulator on competition and antitrust concerns has signaled that eCommerce giant Amazon’s stake in food delivery service Deliveroo may need additional examination.
Reports came from CNBC Wednesday (Dec. 11) that Britain’s Competition and Markets Authority (CMA) has said the stake raises “serious competition concerns” and may need more investigation.
As reported, Amazon, which is based in the U.S., led a $575 million investment round in Deliveroo this year, and Amazon’s reported investment was $500 million.
In a statement, Andrea Domes da Silva, executive director of the authority, said, “If the deal were to proceed in its current form, there’s a real risk that it could leave customers, restaurants and grocers facing higher prices and lower quality services as these markets develop. This is because the significant competition which could otherwise exist between Amazon and Deliveroo would be reduced.” The CMA also said “internal business documents” have shown that Amazon still has “strong and continued interest” in the food delivery arena — and may re-enter the space.
Amazon and Deliveroo have countered that the deal would in fact enhance competition.
“A homegrown U.K. business like Deliveroo should have broad access to investors and supporters,” Amazon said in a statement. “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 by creating more highly-skilled jobs, innovating in the restaurant food delivery sector, and developing new products for customers.”
Deliveroo, for its part, stated that it has been working with regulators on these issues. In its own statement, the company said through a spokesperson, “We are confident that we will persuade the CMA of the facts that this minority investment will add to competition, helping restaurants to grow their businesses, creating more work for riders, and increasing choice for customers. Deliveroo is a British company operating right across the country and this investment will be particularly beneficial to the UK economy.”
The stake in Deliveroo comes after Amazon launched and then shuttered Amazon Restaurants. And as has been specific to the U.K., as recounted by CNBC, the company shut down the operations of takeout and delivery offerings in the U.K. last year.