Amazon’s 16% investment in Deliveroo secures UK CMA clearance

5 August 2020 (Last Updated August 5th, 2020 14:15)

Ecommerce retailer Amazon has secured UK Competition and Markets Authority’s (CMA) clearance for its 16% investment in food delivery start-up Deliveroo.

Ecommerce retailer Amazon has secured UK Competition and Markets Authority’s (CMA) clearance for its 16% investment in food delivery start-up Deliveroo.

The approval follows an in-depth investigation by the CMA, which involved extensive analysis of internal documents from Amazon and Deliveroo and widespread submissions from interested third parties.

It also conducted a survey of more than 3,000 consumers.

In December last year, the regulator completed the initial ‘Phase 1’ investigation and referred the transaction for an in-depth ‘Phase 2’ investigation.

During this second phase, the CMA determined if the deal could lead to a substantial lessening of competition in the coming years.

The regulator revealed that the deal will not lessen competition but will do so if Amazon plans to acquire a controlling interest in Deliveroo.

In a statement, Inquiry Group Chair Stuart McIntosh said: “Today’s final decision is the result of a thorough examination of this deal and the markets in which Amazon and Deliveroo operate.

“The CMA’s initial Phase 1 review of the transaction highlighted potential competition concerns which the independent Inquiry Group has considered in detail during the Phase 2 investigation.

“Taking account of the higher legal standard that applies at Phase 2, the Group has concluded that the transaction will not result in a substantial lessening of competition in either restaurant delivery or convenience grocery delivery.

“Our decision reflects the scale of Amazon’s investment in Deliveroo (16% of the company’s equity) and its incentives to compete in both markets.”

Last month, Amazon started a trial for its online grocery delivery service with free delivery on orders over £40 to Prime members in 300 postcodes in London and the south-east of England.