Amazon deal with Deliveroo hits another delay

UK competition watchdog launches investigation into partnership

Retail giant Amazon’s costly partnership with takeaway delivery group Deliveroo has hit another hurdle, after the UK competition watchdog launched a formal investigation into the merger.

The Competition and Markets Authority (CMA) had expressed concerns about the merger back in May, stating it had “reasonable grounds for suspecting” the agreement could “result in Amazon and Deliveroo ceasing to be distinct”.

The regulator argued that this could lead to a “substantial lessening of competition within any market or markets”.

As a result, the CMA has launched ‘phase one’ of its investigation. If officials within the authority believe the merger could raise prices and reduce competition in the online takeaway delivery sector they will launch an in-depth phase two inquiry in December.

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Amazon and Deliveroo denied that the deal would reduce competition for customers. A spokesperson for Deliveroo said: “Deliveroo and Amazon have been working closely with regulators to obtain regulatory approvals”.

“There are a number of major companies within the restaurant food delivery sector and this investment will enable Deliveroo to expand, innovate and, we believe, will enhance competition.”

If the deal goes ahead it will give Amazon a foothold in the food delivery service, where it has failed in the past. Amazon Restaurants delivery service closed in the UK in November 2018 and in the US in June this year.

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