Amazon’s upcoming tie-up with Deliveroo has been given the final approval by the UK’s competition watchdog after facing a massive backlash from competitors.
The Competition and Markets Authority (CMA) said that following more than a year of considerations it has finally concluded that the deal would “not result in a substantial lessening of competition in either restaurant delivery or convenience grocery delivery”.
Amazon will now be granted permission to take a 16 per cent stake in UK food and now grocery delivery giant Deliveroo.
The deal has drawn criticism and controversy across the industry since Amazon led a $575 million funding round for Deliveroo back in May 2019.
Most recently Domino’s Pizza, one of the only high street fast food chains that doesn’t appear on Deliveroo’s app, warned that the deal would give Amazon “cart blanche” to raise its stake in the company significantly to 50 per cent without further scrutiny.
However, the CMA has stipulated that any attempts by Amazon to raise its stake in Deliveroo could spark a further investigation.
“When looking at any merger, the CMA’s role is to assess whether consumers will lose out from a substantial lessening of competition,” the CMA’s Stuart McIntosh, who led the inquiry said.
“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.”
A Deliveroo spokesperson added: “This is fantastic news for UK customers and restaurants, and for the British economy. British born Deliveroo will use the investment to increase choice and value for customers, support for restaurants and will be able to offer more riders the flexible work they value as the company expands.”
An Amazon spokesperson said: “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.”
The CMA itself has drawn criticism for the handling of the investigation, not least from Amazon and Deliveroo who accused the body of seriously misunderstanding the UK food delivery market at the start of the year.
Months later the CMA was also criticised for its lack of clarity, having given the provisional green light, before given a second provisional approval weeks later for different reasons.