Tuesday 4 August 2020 12:40 pm

CMA gives Amazon's Deliveroo investment the all-clear

The Competition and Markets Authority (CMA) has officially cleared Amazon’s 16 per cent stake in food delivery startup Deliveroo, after a lengthy investigation process.

The watchdog awarded the deal initial clearance in April on the basis that Deliveroo could go out of business without the Amazon investment, but later changed its methodology to just focus on competition after criticism.

The deal then received a provisional nod in June, before today’s final clearance.

The CMA originally held concerns that the tie-up might prevent Amazon from re-entering the online restaurant food market after its exit several years ago, and instead encourage it to increase its presence in the online grocery delivery sector.

However it warned that if Amazon were to acquire a greater stake in Deliveroo, this could trigger a further investigation.

Inquiry chair Stuart McIntosh said: “When looking at any merger, the CMA’s role is to assess whether consumers will lose out from a substantial lessening of competition.

“We have not found this to be the case given the scale of Amazon’s current investment, but if it were to increase its shareholding in Deliveroo, that could trigger a further investigation by the CMA.”

Amazon led a $575m fundraising round in Deliveroo in May 2019, which the parties called “a minority investment”.

Deliveroo said it would use the funds to offer a “hyper-personalised” service to customers, expand its delivery-only kitchens and develop new technology to help restaurant partners.

An Amazon spokesperson said: “Deliveroo is an innovative, customer-obsessed company with a mission-driven leader and we’re committed to this investment.

“Our investment will benefit both consumers of Deliveroo’s service and its small business restaurant partners. UK businesses like Deliveroo continue to benefit from broad access to investors and supporters.”