Amazon’s investment in food delivery app Deliveroo has been cleared by the Competition and Markets Authority. The decision was taken as a result of a “deterioration” in the food delivery start-up’s financial position. The CMA’s chair of the inquiry group, Stuart McIntosh said, “Without additional investment, which we currently think is only realistically available from Amazon, it’s clear that Deliveroo would not be able to meet its financial commitments and would have to exit the market.”
He continued, “This could mean that some customers are cut off from online food delivery altogether, with others facing higher prices or a reduction in service quality. Faced with that stark outcome, we feel the best course of action is to provisionally clear Amazon’s investment in Deliveroo.” Amazon’s minority stake was frozen by the antitrust regulators after claims of competition concerns. The e-commerce company had funded $575 million in Deliveroo in May 2019.
Deliveroo is not Amazon’s first online takeout business, having previously owned Amazon Restaurants. However, they had stopped operations in the UK in 2019 after a year of service. The CMA’s decision will “be a boost to the UK economy”, Deliveroo said.
The unprecedented health crisis we all face has disrupted businesses across the country,” the company said in a statement. “This investment will help us to overcome immediate and long-term challenges, allow us to continue to improve our service for customers, enable us to develop new innovations and offer people even greater choice.”