Amazon, Deliveroo Play Down Competition Fears After Regulator's Alarm -- Update
December 11 2019 - 8:41AM
Dow Jones News
--The U.K.'s Competition and Markets Authority said Amazon's
investment in Deliveroo raises serious competition concerns
--The regulator gave the companies five working days to offer
remedies to address its concerns
--Amazon said Deliveroo should have broad access to investors
and the U.K. startup said it will continue to work with the CMA
By Ian Walker and Adria Calatayud
Amazon.com Inc. (AMZN) has defended its investment in
food-delivery platform Deliveroo, after the U.K.'s Competition and
Markets Authority said it raises serious competition concerns.
The CMA said Wednesday that the investment could damage
competition in online food delivery as Amazon moves into the U.K.
market. It also believes the deal could damage competition for
online convenience grocery delivery.
In May, Deliveroo raised $575 million in a funding round led by
Amazon, in which the U.S. tech giant became one of the biggest
investors in the London-based startup. The CMA launched a formal
probe into Amazon's investment in October.
"There are relatively few players in these markets, so we're
concerned that Amazon having this kind of influence over Deliveroo
could dampen the emerging competition between the two businesses,"
CMA Executive Director Andrea Gomes da Silva said.
The U.K. regulator's warning comes as the food-delivery industry
moves toward consolidation. Takeaway.com NV (TKWY.AE) and Prosus NV
(PRX.AE) are currently battling to take over another U.K.
food-delivery platform, Just Eat PLC (JE.LN), valued at over $6
billion. Last December, Takeway.com paid over $1 billion for the
German operations of European rival Delivery Hero AG (DHER.FF).
Amazon and Deliveroo now have five working days to offer
legally-binding proposals to address the CMA's concerns, otherwise
the regulator may refer the deal for a further investigation.
Amazon said it believes its investment will lead to more
pro-consumer innovation by helping Deliveroo remain competitive in
the restaurant-delivery market and developing new products for
customers.
"A homegrown U.K. business like Deliveroo should have broad
access to investors and supporters," an Amazon spokesperson
said.
Deliveroo said it has been working closely with the CMA and will
continue to do so.
"We are confident that we will persuade the CMA of the facts
that this minority investment will add to competition, helping
restaurants to grow their businesses, creating more work for
riders, and increasing choice for customers," a spokesperson for
Deliveroo said.
Write to Ian Walker at ian.walker@wsj.com and to Adria Calatayud
at adria.calatayud@dowjones.com
(END) Dow Jones Newswires
December 11, 2019 08:26 ET (13:26 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
Amazon.com (NASDAQ:AMZN)
Historical Stock Chart
From Mar 2024 to Apr 2024
Amazon.com (NASDAQ:AMZN)
Historical Stock Chart
From Apr 2023 to Apr 2024