Amazon’s tie-up with Deliveroo has been delayed by two months after the Competition and Markets Authority (CMA) said it needs more time “to take full account of representations received”.
The CMA gave provisional approval for Amazon to purchase a minority stake in Deliveroo in April, but has since seen major names including Just Eat Takeaway and Domino’s Pizza slam its decision.
Originally a final decision on the deal was due to be made on June 11, however the CMA has now extended this to August 6.
“In taking this decision, the (CMA) had regard to the need to take full account of representations received from the parties and third parties in response to the provisional findings and to reflect the impact of coronavirus … in its assessment,” the CMA said.
A key reason for the CMA’s decision to grant provisional approval of the deal was that Deliveroo had been hit hard by the pandemic, with restaurants and many takeaway giants shutting their doors for months.
It said that Deliveroo was in danger of going under without financial support from Amazon.
The decision has been widely criticised by rivals, including Just Eat Takeaway which is now the dominant force in the market.
Just Eat Takeaway, which this week acquired rival Grubhub in a £5.7 billion deal just weeks after the consolidation of Just Eat and Takeaway.com was completed, said this decision was based on “incorrect or misleading data”.
It argued that the CMA’s decision was based on an “extremely narrow” period not representative of the company’s financial health.
Days earlier Domino’s Pizza, which unlike its rivals does not use Deliveroo’s delivery service, strongly criticised the CMA’s decision in a 33-page submission, highlighting concerns about the “negative impact on competition, and ultimately on consumers, of Amazon’s investment in Deliveroo”.
Deliveroo said it was disappointed with the continued delay, stating: “Deliveroo has repeatedly provided evidence to show that Deliveroo and Amazon offer completely different services, will remain distinct entities, and this investment will in fact clearly strengthen competition”.