U.K. antitrust authority, the Competition and Markets Authority (CMA) is investigating the acquisition of certain rights and a minority shareholding in Roofoods Ltd (trading as Deliveroo) by Amazon.
Amazon is an e-commerce and cloud computing company based in the United States and is the world's largest shopping site in terms of total sales volume and market value. On the other hand, Deliveroo is a UK-based online food delivery company that has grown rapidly since it was founded in 2013. Deliveroo currently has sales of close to 500 million sterling worldwide and operates in more than 100 towns and cities across the United Kingdom.
The Authority raised basically two competition concerns for substantial lessening of competition within a market or markets in the United Kingdom: First, the deal could damage competition in online restaurant food delivery by discouraging Amazon from re-entering the market in the UK. Second, the Authority is concerned that the deal could also damage competition in the emerging market for online convenience grocery delivery, where the parties have already established market-leading positions.
Authority is considering whether to accept the acquisitions and the parties have been granted a deadline of 18.12.2019 to submit acceptable commitments to the Authority to address these competition concerns otherwise the merger will be passed to phase-2 investigation.