(Bloomberg) — Amazon.com Inc.’s purchase of a minority stake in U.K. food startup Deliveroo faces a British probe in another sign of mounting antitrust scrutiny of American tech giants.
The Competition and Markets Authority said Friday it’s opening an in-depth investigation of Amazon’s investment of about $500 million, saying it risked a “substantial lessening” of competition “in the supply of online food platforms in the U.K. and in the supply of online convenience groceries.”
The regulator now has until June 11 to rule on the deal after the companies didn’t offer remedies to allay its earlier concerns over the tie-up.
Many were surprised by the CMA’s initial decision to investigate the transaction because the agency doesn’t typically review minority acquisitions. Lawyers said scrutiny of the deal may be down to growing fears about monopolies in Big Tech that have been allowed to go unchecked in the past.
Deals like Facebook Inc.’s 2014 acquisition of WhatsApp sailed through with relatively little antitrust oversight at the time, but are now raising questions among regulators who see large tech companies leverage user data from those acquisitions in other areas to boost their market power.
“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,” Deliveroo said in an emailed statement.
Amazon representatives didn’t immediately respond to requests for comment.
The in-depth probe comes as competition heats up in the global food delivery market.
The likes of Uber Technologies Inc.’s Uber Eats platform are going up against a proliferation of apps for a share of the fast-growing sector, while other players are consolidating.
Dutch groups Prosus NV and Takeaway.com NV have been vying to take over British food delivery firm Just Eat Plc, while Germany’s Delivery Hero SE in December said it would take control of South Korea’s biggest food delivery app, Woowa Brothers Corp.
–With assistance from Aitor Ortiz, Diana Gomes and Jonathan Browning.
To contact the reporters on this story: Eddie Spence in London at [email protected];Natalia Drozdiak in Brussels at [email protected]
To contact the editors responsible for this story: Christopher Elser at [email protected], Peter Chapman, Nate Lanxon
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