Preiskel & CoPreiskel & Co
Preiskel & Co
  • Home
  • About Us
    • Diversity, Social Responsibility, and Pro Bono
  • Services
    • Corporate
    • Commercial
    • Regulatory
    • Competition & Antitrust
    • Data Protection, Privacy, and Retention
    • Intellectual Property
    • Dispute Resolution
    • Employment
  • Sectors
    • Telecommunications
    • IT, Technology, & Internet
    • Media and Broadcasting
    • Websites, Blogging, & Social Media
    • Film & Television
    • Gambling & Online Gaming
    • Leisure & Retail
    • Energy & Minerals
    • Cryptocurrency & Blockchain
    • Creative Industries
  • People
    • Daniel Preiskel
    • Ronnie Preiskel
    • Tim Cowen
    • Jose Saras
    • Robert Dougans
    • Karthyaeni Vittala
    • Tina Cowen
    • D A T Green
    • Richard Stewart
    • Mor Swiel
    • Ilanit Appelfeld
    • Stephen Dnes
    • Daniel Oakland
    • Robert Harvey
    • Martina Raciti
    • Joanna Coombs-Huang
    • Xavier Prida
    • Stewart White
    • Alison MacFarlane
    • Hannah Leader
    • Peter Dally
    • Antony Corel
    • Sue Warwick
    • Tony Curzon-Price
    • Shardi Shameli
    • Stephen Hornsby
    • Ewelina James
    • Maria Constantin
    • Sophia Yakhno
    • Rachael Machado
  • International
  • Blog
  • News
    • Publications
  • Contact
Menu back  

Amazon investment into Deliveroo cleared by CMA

August 7, 2020By Preiskel & Co

After 15 months of investigation following the imposition of an Initial Enforcement Order in June 2019, Amazon’s acquisition of 16% of the RooFoods business, better known by its trading name Deliveroo, has been cleared by the CMA. Amazon announced that it would be leading a $575 million Series G investment in the food delivery business in May 2019. In December 2019, following a Phase 1 investigation, the CMA concluded that there was sufficient reason to believe that the merger would result in a significant loss of competition (SLC) and referred the deal for a Phase 2 investigation.

Soon after the CMA began its Phase 2 investigation, COVID-19 hit Europe. The pandemic had an impact on the market and on Deliveroo’s business. This caused the investigation’s focus so change somewhat. At first the impact of the coronavirus looked very negative, with Deliveroo claiming it would go out of business without Amazon’s investment. On the basis of these submissions, the CMA provisionally concluded that Deliveroo’s exit from the market would have been worse for competition than the impact of the transaction. The CMA therefore provisionally approved Amazon’s investment.

However, when it became apparent to the CMA that Deliveroo’s financial position had experienced a turnaround and “the restaurant food delivery market had recovered much more sharply than had been expected and that the restaurant ‘mix’ had also shifted towards smaller, independent restaurants and away from large fast food chains, several of which closed or stopped offering home delivery” (CMA Press Release, 04/08/2020), the CMA determined that Deliveroo was not in fact a failing firm.

The deal was still cleared by the CMA based on the evidence gathered prior to the pandemic, on the basis that the scale of Amazon’s 16% stake would not impact on their desire to compete against Deliveroo in the restaurant and grocery delivery markets, nor would it mean that Amazon would have a large enough stake in the business to result in some significant control. It should be noted that firms whom expect to require merger clearance from the CMA, should be prepared for the lengthy timeframes of getting that clearance.  Furthermore, it is surprising that this determination took a Phase 1 and Phase 2 enquiry to reach, given that the rationale for the decision could have been based off data easily obtainable by the CMA.

Stuart McIntosh, Inquiry Chair, commented: “When looking at any merger, the CMA’s role is to assess whether consumers will lose out from a substantial lessening of competition. 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.”

Details of the CMA’s findings can be found on the case page.

Please contact Tim Cowen if you have any questions about the CMA decision, or competition law more generally.

Latest Preiskel & Co blog posts
  • New EU rules to boost IoT data sharing: the EU Data Act
    March 30, 2023
  • Advocate General Opinion on Automated Credit-Scoring & Retention of Insolvency Data
    March 28, 2023
  • White House’s Economic Report of the President sets out a roadmap to improve competition in digital markets
    March 22, 2023
  • Brussels Conference brings in industry leaders to discuss the international antitrust landscape
    March 22, 2023
  • Issues in the UK’s forthcoming Digital Markets, Competition and Consumer Bill
    March 17, 2023
  • Stormy weather for cloud computing in the EU
    March 16, 2023
  • Inmarsat Takeover Provisionally Cleared for Take-Off
    March 10, 2023
  • EDPB’s Feedback on the New EU-U.S. Data Privacy Framework
    March 6, 2023
  • UK Data Reform Bill to return to the House of Commons
    March 3, 2023
  • DCMS Publishes New Security and Privacy Principles for App Store Operators and Developers
    February 16, 2023
  • DPO’s Dismissal & Conflicts of Interest Under The EU GDPR – CJEU Ruling
    February 14, 2023
  • ICO – Change of Deadline for Reporting Breach Notifications for Communication Service Providers
    February 6, 2023

The Preiskel Blog

  • New EU rules to boost IoT data sharing: the EU Data Act 30 Mar 2023
  • Advocate General Opinion on Automated Credit-Scoring & Retention of Insolvency Data 28 Mar 2023
  • White House’s Economic Report of the President sets out a roadmap to improve competition in digital markets 22 Mar 2023
  • Brussels Conference brings in industry leaders to discuss the international antitrust landscape 22 Mar 2023

Preiskel news

  • Senior Partner, Danny Preiskel, quoted by IT Pro on the costs incurred by MNOs
  • Senior Partner, Danny Preiskel, will be a panellist at GCCM Carrier Community 2023 on IOT
  • Jose Saras and Xavier Prida Awarded First Place as Data Protection Thought Leaders in the UK
  • Ronnie Preiskel chosen to judge 24 May 2023 The Tech Capital Global Awards
Preiskel tweets
  • New EU rules to boost IoT data sharing: the EU Data Act. Find out more at: https://t.co/1OUHlssIOB2 days ago
  • Advocate General Opinion on Automated Credit-Scoring & Retention of Insolvency Data. Find out more here: https://t.co/bJkvPBvj6F4 days ago
  • Issues in the UK’s forthcoming Digital Markets, Competition and Consumer Bill. Find out more: https://t.co/3BHP1xq69Y9 days ago
Preiskel & Co LLP
4 King's Bench Walk,
Temple,
London
EC4Y 7DL
United Kingdom

Tel: +44 20 7332 5640
Email: info@preiskel.com

Find us on:

TwitterLinkedinMail
© Preiskel & Co LLP 2023 | Site map | Legal notices | Cookie Policy | Privacy