Amazon’s big bet on UK food delivery is in jeopardy
The Competition and Markets Authority said in a statement Friday that it had opened a “phase 2” probe after the companies failed to address its concerns about how the deal would affect the market for online deliveries of restaurant meals and groceries.
“There’s a real risk that it could leave customers, restaurants and grocers facing higher prices and lower quality services as these markets develop,” Andrea Gomes da Silva, the regulator’s executive director, said in statement earlier this month.
A spokesperson for Deliveroo said the company would continue to work closely with the regulator.
“We are confident that we will persuade the [Competition and Markets Authority] 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,” the spokesperson said in a statement.
Amazon’s UK ambitions
Deliveroo operates in 14 countries including Australia and France. It is present in more than 100 towns and cities across Britain, offering online delivery services for restaurants and convenience stores.
Earlier this month, the regulator said that it was also concerned that the deal would discourage Amazon from re-entering the online food delivery market as a competitor to Deliveroo in the future. The companies fought for the same customers before Amazon shuttered its Amazon Restaurants business last year.
Amazon’s direct participation in the restaurant delivery business would “significantly increase competition in online restaurant food delivery,” the regulator said.
The antitrust authority also warned that the deal would damage competition in the emerging market for online grocery delivery, where Amazon and Deliveroo are two of the strongest players.
— Hanna Ziady contributed reporting.