The UK Competition and Markets Authority (“CMA”) has set its sights on Amazon’s investment in Roofoods Ltd, trading as Deliveroo, issuing an Interim Enforcement Order on 24 June 2019.
Amazon was the lead investor in a financing round announced by Deliveroo in May, acquiring a minority stake in the food delivery business.
The Interim Enforcement Order prohibits any further integration between the two companies while the CMA assesses whether or not to refer for a Phase 1 Merger Investigation, meaning both businesses will continue to be run separately.
In the event that the CMA does launch a Merger Inquiry, they will have to assess whether Amazon’s acquisition would cause a substantial lessening of competition in the relevant market.
A Deliveroo spokesperson has argued that the investment will “enhance competition“, while competing food delivery services saw their shares fall upon the announcement of the investment.
For many who have called for Competition Authorities to take on tech giants such as Amazon, Google, and Facebook, this will be welcome news. The CMA’s decision falls within a context of a notable step up from the CMA in the use of its powers regarding enforcement orders under the merger regime, and will be a case to watch for many in the industry.
The CMA case page can be found here.
Please contact Tim Cowen if you have any questions regarding this CMA Inquiry.