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Fri 5th Jul 2019 - CMA intervenes over Amazon’s investment in Deliveroo
CMA intervenes over Amazon’s investment in Deliveroo: The Competition and Markets Authority (CMA) has ordered Amazon and Deliveroo to pause any integration efforts pending an investigation into potential breaches of competition rules. The CMA has today (Friday, 5 July) issued an initial enforcement order against the companies after Amazon bought a stake in Deliveroo. The order is preliminary to a decision, with no set deadline, on whether to launch a full merger inquiry. Amazon was the lead investor in a $575m (£457m) financing round announced in May, which valued Deliveroo at more than £4bn. Amazon bought a minority stake in the company but the order was signed by the CMA’s director of mergers. The CMA said it had “reasonable grounds for suspecting” Amazon and Roofoods, which trades as Deliveroo, had “ceased to be distinct” or were planning to merge, which would break competition rules. Amazon was tipped as a potential buyer for Deliveroo after its own effort at hot food delivery, Amazon Restaurants UK, shut in December barely two years after opening. Deliveroo, which was founded in London by former investment banker Will Shu, had also been cited as a possible takeover target for Amazon amid heavy investment in technology. The CMA’s order means Deliveroo will be banned from taking any actions that could lead to its integration into Amazon’s business while the regulator makes its decision. Both businesses will be forced to maintain their current level of service in the UK and won’t be allowed to make changes to big contracts or senior management without prior written permission from the CMA. A Deliveroo spokesman said: “Deliveroo and Amazon have been working closely with regulators to obtain regulatory approvals. There are a number of major companies within the restaurant food delivery sector and this investment will enable Deliveroo to expand, innovate and, we believe, will enhance competition. This investment will help create jobs and restaurants grow their businesses and will improve choice for consumers.” An Amazon spokesman added: “We believe this minority investment will enable Deliveroo to expand its services, benefiting consumers through increased choice and creating jobs as more restaurants gain access to the service.”

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