Deliveroo and Amazon want the deal to be continued. (Image via: Marketingweek.com)

Britain's CMA Impedes Amazon Investment in Deliveroo

The UK’s competition regulator will investigate Amazon's recent investment in food delivery start-up Deliveroo. Britain’s CMA revealed recently that they impede the Amazon investment based on reasonable ground, which is both of the parties would “cease to be distinct”. It means the CMA suspects Amazon and Deliveroo are merging with each other. The CMA’s decision suggests that they are taking a firmer approach to the dominance of big technology firms and protecting consumers from anti-competitive behaviour.

Two months ago Amazon led a $575 million (£450 million) fundraising in Deliveroo. It was included the investment from T. Rowe Price, Fidelity Management and Research Company, as well as Greenoaks. The investment made Deliveroo’s value increased to £3 billion. Deliveroo became one of the UK’s most successful tech start-ups in recent years. During the investigation, Deliveroo and Amazon have to lay low for a while. CMA said that the Deliveroo business has to be carried on separately from the Amazon business. Both sides also have separated sales and brand identity. Then the last rule is no substantive changes are made to the organizational structure or the management responsibilities in each other’s business.

The Amazon investment in Deliveroo is Amazon's latest attempt to enter the takeaway delivery market. Amazon already shut down its own restaurant delivery service before, which were in the U.K. last year and in the U.S. last month. The spokesperson from Deliveroo and Amazon said that they have been working closely with Britain’s CMA to obtain their approval. The two companies argue that the investment will help Deliveroo grow its coverage, increase competition, and expand the restaurant sector.

Source: https://www.independent.co.uk/news/business/news/amazon-investment-deliveroo-halted-competition-watchdog-a8990266.html