UK competition law authority CMA has provisionally cleared Amazon’s investment in Deliveroo due to deterioration in Deliveroo’s financial status as a consequence of COVID-19 pandemic.
As per Phase I investigation, the Authority raised competition concerns that the deal could damage competition by discouraging Amazon, which tried to enter the online restaurant market in 2018, from re-entering to the UK market.
While CMA was continuing Phase II investigation, Deliveroo informed the CMA that the impact of the lockdown in the UK due to the coronavirus pandemic on its business meant that it would fail financially and exit the market without the Amazon’s investment which is the only realistic option to provide additional funding. Considering this urgency, CMA came to the conclusion that without the deal, Deliveroo’s exit from the market would be inevitable and that a potential exit would be worse for competition than clearance of the transaction. In a potential exit scenario, some customers may have difficulty with accessing online delivery and may face with higher prices during the pandemic.
CMA will assess all evidences and make its final decision until 11 June 2020. (CMA – 17.04.2020)
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NAZALI TAX & LEGAL |