CMA clears Amazon’s £442m investment in Deliveroo

The Competition and Markets Authority (CMA) has cleared Amazon’s £442m investment in Deliveroo following an in-depth investigation.

In June, the CMA determined Amazon’s investment in Deliveroo wouldn’t result in a significant lessening of competition in the restaurant or grocery sector but invited comments on the deal, which will see Amazon take a 16% stake in Deliveroo.

The CMA stated: “The CMA’s final decision to clear the deal on competition grounds is the culmination of extensive analysis of internal documents from Amazon and Deliveroo, a survey of more than 3,000 consumers, and extensive submissions from interested third parties.

The CMA’s assessment has focused on how a 16% shareholding held by Amazon would affect its incentives to compete independently with Deliveroo in restaurant delivery and online convenience grocery delivery in the coming years. The CMA ultimately found this level of investment won’t substantially lessen competition in either market.

However, if Amazon was to acquire a greater level of control over Deliveroo – through, for example, acquiring a controlling interest in the company – this could trigger a further investigation by the CMA.”

The CMA provisionally approved Amazon’s bid in April, stating the food delivery startup could face collapse because of the impact of coronavirus with the cash to save it “realistically only available from Amazon”.

However, the CMA said in its subsequent report it no longer believed the “failing firm” defence was valid but its consideration of the investment purely on competition grounds led it to the same conclusion.

Inquiry chairman Stuart McIntosh said: “When looking at any merger, the CMA’s role is to assess whether consumers will lose out from a substantial lessening of competition. We haven’t found this to be the case given the scale of Amazon’s current investment.”