Dec 11, 2019

Amazon deal with Deliveroo faces in-depth competition probe

The UK competition regulator has said Amazon's investment in Deliveroo could harm competition in the online food delivery and grocery markets in the UK and will launch a deeper investigation if the groups do not offer remedies, in a move branded "Tectonic" by one analyst. Amazon revealed in May that it was leading a $575m funding round in Deliveroo, having closed its own food delivery company Amazon Restaurants at the end of last year. On Wednesday the Competition and Markets Authority said that deal "In its current form" could lead to higher prices and a worse service for customers, even though the minority investment would not enable Amazon to take full control of Deliveroo's business. An Amazon spokesperson said: "A homegrown UK business like Deliveroo should have broad access to investors and supporters. Amazon believes that this investment funding will lead to more pro-consumer innovation by helping Deliveroo continue to . . . 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." Amazon entered the UK online grocery market three years ago with Amazon Fresh, Pantry and the Amazon Grocery store.

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