Published: Mon, July 08, 2019
Markets | By Otis Pena

Competition watchdog to examine Amazon-Deliveroo deal

Competition watchdog to examine Amazon-Deliveroo deal

The Competition and Markets Authority, Britain's antitrust watchdog, today announced that it has frozen the retail giant's May investment into London food delivery startup Deliveroo.

The CMA said it had "reasonable" grounds to believe the companies "have ceased to be distinct".

"Amazon wants to get any product to the customer fast and to 'own" the customer for everything they possibly want in their life'.

US regulators and lawmakers are studying whether Amazon, Facebook, Google and Apple have broken antitrust laws. "As well as the focus upon an investment as opposed to a total take-over, this move by the regulator may also spell a change of view around mega-tech and their expansion in the U.K".

Deliveroo noted that it was competing with a number of major companies in the sector and that the investment would help to create jobs and restaurants to expand. In the case of Amazon, the order applies only to its United Kingdom and European Union subsidiaries. "Amazon in my view are the best operators in the world and, to the extent we can learn from them and what they've been able to build over the last 20 years, that is what I'm most excited about", he said.

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Deliveroo, which was founded in London by the former investment banker Will Shu, had previously been cited as a possible takeover target for Amazon amid heavy investment in technology. Amazon led a $575 million funding round for Deliveroo in May, bringing the food delivery app's valuation to roughly $1.5 billion.

"Deliveroo and Amazon have been working closely with regulators to obtain regulatory approvals", a Deliveroo spokesman told Bloomberg in a statement.

Under the chairmanship of former MP Andrew Tyrie the CMA has taken a harder line on deals that it thinks will harm consumers, including quashing Sainsbury's attempted purchase of Asda.

"We believe this minority investment will enable Deliveroo to expand its services, benefiting consumers through increased choice and creating new jobs as more restaurants gain access to the service", Amazon said.

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