UK CMA Decision Looms Over Amazon’s Quest For Deliveroo Stake

The Competition and Markets Authority (CMA) will decide on Wednesday (Dec. 10) if Amazon’s quest to acquire a stake in Deliveroo — among the U.K.’s most thriving startups — can move forward.

Antitrust concerns caused CMA to freeze the deal between Amazon and Deliveroo in October and will decide if the investigation should continue, Bloomberg reported on Monday (Dec. 9).

The eCommerce giant bid roughly $500 million for a minority stake in the food-delivery service.

“The CMA is very interested in tech giants extending their tentacles into other markets,” Alan Davis, a competition lawyer at Pinsent Masons in London, told Bloomberg. Antitrust regulators “are paranoid about it at the moment because they are concerned they have not looked at these mergers enough in the past, like Facebook-WhatsApp.”

EU officials accused Facebook of misleading them when the social media giant acquired WhatsApp in 2014 and changed its data-handling policy. Big Tech is now on the antitrust radar worldwide, with the U.S. having active investigations into Google, Facebook and Amazon. The CMA is also probing Google’s $2.6 billion takeover bid for Looker Data Sciences.

CMA CEO Andrea Coscelli previously stated that Facebook’s Instagram acquisition was an error. The CMA doesn’t generally investigate minority stake deals, but Amazon’s access to massive data likely triggered concerns.

“U.K. regulators may have some antitrust concerns with the proposed investment,” said Bloomberg intelligence analysts Aitor Ortiz and Diana Gomes. “One of them could be whether Amazon could get access to Deliveroo’s user data, leveraging the delivery giant’s position in other markets besides on-demand restaurant delivery, such as online groceries.”

The stakes are high for Deliveroo, which lost £232 million in 2018 even with global sales up 72 percent. The takeaway startup has already raised $1.53 billion in funding from investors.

Despite numerous acquisitions and international expansion in the delivery sector, Amazon has yet to successfully break-in, closing its U.K. and U.S. takeaway divisions — Amazon Restaurants — last year.

In August, Deliveroo said it will end its operations in Germany and shift its focus to other markets. The company has been backed by Amazon, where the eCommerce giant invested $575 million in Deliveroo earlier in the year.