Amazon and Deliveroo Deal Under Formal Investigation from Competition Watchdog

The UK’s competition watchdog, The Competition and Markets Authority (CMA), has launched a formal investigation into Amazon’s investment in Deliveroo, which has the right to block deals if there’s reason to believe that consumers will have less choice.

Though Amazon’s investment in Deliveroo was not disclosed in the exact amount, the company had led a £450m funding round in Deliveroo in May.

The CMA believes is has reasonable grounds for suspecting that the deal may result in the two companies ceasing to be distinct.

Speculations came around enquiring if Amazon was using Deliveroo to take on tech rivals like Uber after it closed down its own in-house food delivery platform, Amazon Restaurants, after UK operation for under two years.

Earlier this week, the CMA confirmed that it will be pursuing the initial investigation into whether or not the deal will lessen competition within the food delivery market.  If so, the two firms can take action or there will be a second phase of the investigation that could lead to the deal being disallowed.

The deadline for the watchdog to make an announcement on the matter is the 11^th of December.

Earlier this year, the CMA prevented the merge between Sainsbury’s and Asda as it was proven to impact the quality of products available to the consumers.