Amazon’s investment of around US$500 million for a minority stake in food delivery startup Deliveroo is being investigated by the UK Competition and Markets Authority (CMA) over potential anti-competition issues, according to a report by Bloomberg.
The move signals that Big Tech companies and their acquisitions are going to be under more and more scrutiny as regulators from countries all over the world continue to open investigations.
The CMA stated the deal between Amazon and Deliveroo had the potential to have a “substantial lessening” effect on competition as well as “in the supply of online food platforms in the UK and in the supply of online convenience groceries.”
The CMA will rule on its findings by June 11. The CMA doesn’t typically investigate smaller acquisitions, but lawyers have mentioned that the probe could be more related to rising questions about Big Tech in general, and past acquisitions that weren’t investigated at all.
Facebook’s acquisition of both Instagram and WhatsApp went through fairly easily, but only now are regulators realizing the data implications of those deals, and the amount of power it gives one company.
“A homegrown UK business like Deliveroo should have broad access to investors and supporters,” an Amazon spokesman said.
The spokesman also said Amazon’s investment “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 food delivery space is fraught with competition, with companies like Uber Eats vying for market share, and smaller companies taking to consolidation to compete.
For example, Prosus and Takeaway.com are trying to take market share from Just Eat, and Delivery Hero in Germany announced it is going to buy out South Korea’s Woowa Brothers.
Deliveroo stated the company is “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.”
Full Content: PYMNTS
Want more news? Subscribe to CPI’s free daily newsletter for more headlines and updates on antitrust developments around the world.
