Britain’s competition watchdog, the Competition and Markets Authority, has raised concerns over Amazon’s investment in food delivery app Deliveroo.
The CMA said the online behemoth’s lead role in Deliveroo’s $575m (£436m, €518m) May investment round “raises serious competition concerns”. The size of Amazon’s stake has not been disclosed, although both companies have insisted it was only a minority interest.
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This is the just latest statement of concern. In July the CMA signalled “reasonable grounds for suspecting” the two companies planned a merger that threatened to violate British competition regulations.
The CMA fears competition in two key sectors – online food delivery and online grocery delivery – could be threatened by Amazon’s increasing stakes.
An Amazon representative said: “Amazon believes that this investment funding will lead to more pro-consumer innovation by helping Deliveroo continue to build its world-class service and remain competitive in the restaurant food delivery space.”
The company emphasised its desire to invest in British businesses and said they “should have broad access to investors and supporters”.
Deliveroo said: “We are confident that we will persuade the CMA 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.”
Both companies have five working days to come up with proposals to address the CMA’s concerns. Then the watchdog will decide whether to launch an in-depth investigation.
Investing in the start-up enabled Amazon to secure its place as a dominant force in the delivery sector, along with its increasingly popular AmazonFresh service.
The CMA announcement had seemingly had little effect on share prices. Amazon shares are up slightly in pre-market trading, while Deliveroo is a private company.