CMA threatens investigation into Amazon-Deliveroo tie-up

The UK Competition and Markets Authority (CMA) has indicated it may do a full investigation into plans by Amazon to buy a stake in hot food delivery giant Deliveroo thanks to the potential of the deal to impact on competition in the sector.

The deal was set to take place in June when the CMA served an enforcement notice on the owners of Deliveroo, Roofoods to stop the investment while it decided whether to investigate the issue. The investment was announced in May when Amazon said it would be the largest investor in an investment round worth $575 million.

Any interested party is invited to make comments on the transaction, with the deadline of 30th September to file those comments.

Doug Gurr, Amazon UK country manager, said: “We’re impressed with Deliveroo’s approach, and their dedication to providing customers with an ever increasing selection of great restaurants along with convenient delivery options.”

It is interesting to note that Amazon has only recently pulled out of hot food delivery in some parts of the world. Buying into one of the most successful global players in a crowded market that is not easy to compete in seems a logical move for a company that is getting its logistics arm really under way. The buying power of Amazon is such that competition could be impacted should it have too much control of Deliveroo, making one of the biggest global players almost untouchable in a market where even multibillion dollar companies have failed or pulled out.

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