Tuesday 28 January 2020 3:06 pm

CMA sets out the issues in Amazon’s Deliveroo investment

The Competition and Markets Authority (CMA) has today laid out plans for the next stage of its investigation into the Amazon and Deliveroo tie-up. 

The regulator has set out the key areas it plans to assess. It includes whether the deal could damage competition in the online restaurant food delivery market and the emerging market for online convenience grocery delivery. 

Phase 1 of the investigation found that Amazon’s investment may give it the ability to “exercise material influence over Deliveroo.” 

Yesterday it was reported that the two companies are set to issue a joint submission to the CMA this week which will accuse the regulator of misunderstanding the market. 

Both companies said the probe is “speculative and not supported by evidence”, according to Sky News. 

The regulator referred the deal to a full investigation in late December, casting doubt on whether the investment will be allowed.

It had previously said that a deal between the two companies could cause higher prices and lower quality for consumers. 

Last week the watchdog said it was opening an investigation into the Just Eat and Takeaway.com merger, which could jeopardise the long-awaited deal.

The two companies are expected to be slapped with an “enforcement order”. It would prevent the merger getting the green light whilst the investigation is under way.

The CMA expects to issue its provisional findings into the Amazon and Deliveroo probe in mid to late April. The statutory deadline for its final decision is 11 June 2020. 

A spokesperson for Deliveroo said: “Deliveroo has been working closely with the CMA and will continue to do so. 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.” 

A spokesperson for Amazon 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”.