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CMA provisionally cleared Amazon’s 16% investment in Deliveroo

Christian Fernsby ▼ | June 25, 2020
The CMA has provisionally cleared Amazon’s 16% investment in Deliveroo, on the basis that it is not likely to result in a substantial lessening of competition.
CMA   Deliveroo
A detailed assessment of Deliveroo’s finances shows considerable improvement in its financial position, reflecting, in part, changes which were not foreseeable during the early stages of the pandemic.

Topics: CMA Amazon Deliveroo

Consequently, the CMA has now provisionally concluded that Deliveroo would no longer be likely to exit the market in the absence of this transaction.

Given this, the CMA is instead required to base its provisional decision specifically on the impact of the transaction on competition between the two businesses.

The CMA has reviewed extensive evidence, including large volumes of internal documents from Amazon and Deliveroo, a survey of over 3,000 consumers, and extensive submissions from interested third parties.

It has focused, in particular, on how the shareholding held by Amazon could affect its incentives to compete independently with Deliveroo.

Based on this detailed analysis, the CMA has provisionally found that the investment should be cleared because it is not expected to damage competition in either restaurant delivery or online convenience grocery delivery.

This decision reflects the 16% shareholding that Amazon is acquiring at the present time.

Were Amazon to acquire a greater level of control over Deliveroo, in particular by making a full acquisition of the company, this could trigger a further investigation by the CMA.