The British competition watchdog CMA has agreed to Amazon‘s acquisition of a 16 % share in Deliveroo. The deal was already signed in May 2019, but the approval was delayed for twenty months because of competition concerns.
Year-long inquiry
After a year-long inquiry, Amazon has been given permission to buy a minority stake in Deliveroo. The latter had announced in May 2020 that it had raised 575 million dollars (half a billion euros), including a significant investment by Amazon. Two months later, however, the deal was halted by the CMA in order to launch an investigation into the effects on the food delivery market.
The Competition and Markets Authority was afraid that a combination of the meal delivery company with the all-round online giant would disturb the market – especially as the latter still operated Amazon Restaurants (a competitor to Deliveroo) in the United Kingdom; a service that has since been discontinued.
Pressure on watchdog
Things started to change when Covid-19 hit the United Kingdom: Deliveroo started pressuring the watchdog, stating fears that it would go bankrupt without fresh capital. The CMA therefore gave a temporary go-ahead in April, but decided to continue the inquiry.
That decision has now been given a definitive seal of approval, CNBC reports: it found no clues that consumers would have less freedom of choice after the deal is finished. Still, the watchdog warned Amazon that it may reopen the investigation, should it increase its stake in Deliveroo.
