Amazon’s speculation into Deliveroo, a food delivery serviceraises antitrust issues and might require additional investigation, the UK rivalry regulator claimed on Wednesday. The tech giant from U.S. drove a $575 million funding round for the start-up based in London this year. While the precise Amazon’s stake value hasn’t been known, as per the reports, the company has put $500 million into Deliveroo as per the deal.
As per its Wednesday announcement, Britain’s Competition and Markets Authority stated the deal comes with various competition issues and might nneda comprehensive investigation.
In case the deal was to be taken further in its present form, there exists a real risk that it could leave clients, grocers and restaurants to face more significant expenses and low-quality services as these business sectors develop is what executive director of the CMA,Andrea Domes da Silva had to say. Andrea further added that this is on the grounds that the critical competition which could somehow exist among Deliveroo and Amazon will be reduced.
Previously, Amazon has made its foray in the food business with Amazon Restaurants; however, the company decided to close it. Already, it had shut delivery service and takeout operations in last year.
According to the CMA, the proof from “internal business documents” proved that Amazon still is interested in the food delivery field and might think of re-entering the industry. It further said that it thinks this deal might likewise harm competition in the groceries’ delivery online. The two organizations currently have 5 working days to look into these issues.
Deliveroo stated that the company is working with the competition regulator and has plans to continue doing it. A representative for Deliveroo said that they will certainly convince the CMA of the realities that this minority investment will add to rivalry, which in turn will help restaurants increase their business. This will provide more jobs for riders as well as increase options for customers.