Wednesday 16 October 2019 11:52 am

Watchdog launches investigation into Amazon's Deliveroo investment

The competition watchdog has launched a probe into Amazon’s investment in food delivery app Deliveroo.

The Competition and Markets Authority (CMA) today said it would investigate whether Amazon’s investment would “result in a substantial lessening of competition”. The e-commerce giant led a $575m funding round in Deliveroo in May. 

Read more: CMA puts brakes on Amazon’s Deliveroo investment

Following the initial phase of the investigation, the watchdog will decide whether to progress it’s inquiries by 11 December. 

The funding round, which also included money from existing investors T Rowe Price, Fidelity Management and Greenoaks, took Deliveroo’s total capital raised to $1.53bn.

Deliveroo said in May it planned to use the cash to “invest heavily” in its London technology team as well as expansion to reach new customers. 

It was previously reported that Amazon had made two offers to buy Deliveroo outright and Uber, which has its own takeaway service, was reported to have held talks about an acquisition.

Read more: Amazon leads £450m Deliveroo funding round

Amazon cancelled its own London food delivery service Amazon Restaurants UK in December after two years amid fierce competition from Uber Eats, Deliveroo and Just Eat.

A spokesperson for Deliveroo said: “Deliveroo is cooperating fully with the CMA. This minority investment will help to create jobs, help restaurants to grow their businesses, improve choice for consumers and enhance competition in the UK food delivery sector”. 

Amazon declined to comment.