rain.png
Tuesday February 25th, 2020 4:37AM

UK investigates Amazon deal with food delivery firm

By The Associated Press
Related Articles
  Contact Editor

LONDON (AP) — The U.K. competition watchdog on Friday launched an investigation into Amazon's purchase of a big stake in food delivery service Deliveroo, a move that suggests authorities are taking a harder line on the expansion of Big Tech.

While the deal had not been billed as a takeover by Amazon, the Competition and Markets Authority said it has "reasonable grounds for suspecting" that the agreement could "result in Amazon and Deliveroo ceasing to be distinct."

The investigation will put on hold any plans to merge its operations with Deliveroo, whose delivery bikes and scooters are ubiquitous in many major cities. Besides Britain, it also operates in several countries in Europe and Asia, including Germany, France, Italy and Australia.

The investigation comes as the regulator is taking a more activist role in seeking to protect consumers in an evolving marketplace.

"This type of deal is right in the CMA's area of interest at the moment - large tech incumbents like Amazon investing in smaller rivals - so called "killer acquisitions," said Nicole Kar, head of the London Competition Practice at law firm Linklaters.

"You might not think there is much competition between Deliveroo and Amazon right at present given Deliveroo is very focused on food delivery but that's too simplistic. Amazon wants to get any product to the customer fast and to 'own' the customer for everything they possibly want to buy in their life and every way they want it delivered."

The investigation also comes as American authorities likewise are taking steps to reign in the growing power of large tech firms. The U.S. Justice Department and the Federal Trade Commission are moving to investigate Google, Facebook, Amazon and Apple over their aggressive business practices. In the U.S. Congress, the House Judiciary Committee has announced an antitrust probe, promising "a top-to-bottom review of the market power held by giant tech platforms."

In Britain, authorities on Wednesday launched a "digital markets strategy," to respond to online platforms and to make the U.K. competition rules fit for the modern age. It says it will cooperate with authorities in other countries to "consider the need for new approaches."

In the case of Amazon's deal, British authorities will be looking into whether Deliveroo's partnerships with grocers like the Co-Op might signal an intention to build food delivery services beyond the core Deliveroo model at the moment, which is the delivery of food-to-go from restaurants and cafes. Kar added that the watchdog would be looking at whether the investment Amazon made into Deliveroo would give the tech titan the right to determine strategy and investment.

The exact amount of money Amazon spent on the stake is unclear, but Deliveroo's last fundraising round brought in 450 million pounds ($564 million) from multiple investors, with Amazon becoming the largest.

The CMA could block any deal, as it did recently by halting the attempted supermarket merger of Sainsbury's and Walmart's Asda unit. The watchdog concluded that the creation of the country's biggest supermarket would push up prices and reduce quality for shoppers.

Both Amazon and Deliveroo pledged Friday to work closely with regulators.

"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," Deliveroo said in a statement.

Amazon says the expansion will benefit consumers by increasing choice and by "creating new jobs as more restaurants gain access to the service."

  • Associated Categories: Associated Press (AP), AP World News, AP Business, AP Business - Corporate News
© Copyright 2020 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
UK investigates Amazon deal with food delivery firm
The U.K. competition watchdog is investigating Amazon's purchase of a significant stake in food delivery service Deliveroo
8:45AM ( 12 minutes ago )
Trump calls America's story 'the greatest political journey'
Trump supporters praise his Fourth of July tribute to the US military while his critics accuse him of putting himself center stage on a holiday devoted to unity
8:42AM ( 16 minutes ago )
At Tehran symphony, music lovers seek escape from reality
An evening at Tehran's symphony orchestra offers brief respite from heightened tensions with the United States and punishing economic sanctions
8:35AM ( 23 minutes ago )
Associated Press (AP)
Warren pitches executive orders on race, gender pay gap
Elizabeth Warren announces executive orders she would sign as president aimed at addressing the wage and employment leadership gap for women of color
8:03AM ( 54 minutes ago )
Putin awards seamen killed by fire on navy's submersible
Russian President Vladimir Putin has presented the nation's highest awards to 14 seamen who died in a fire on one of the navy's research submersibles
7:44AM ( 1 hour ago )
Global stock markets subdued ahead of US jobs data
Asian stocks rise, Europe opens lower as investors wait for American employment data and details of U.S.-Chinese trade talks
7:19AM ( 1 hour ago )
AP Business
Samsung predicts 56% drop in 2Q profit on weak chip market
Samsung Electronics Co. says its operating profit for the last quarter likely fell more than 56% from a year earlier amid a weak market for memory chips
3:10AM ( 5 hours ago )
Malaysian ex-PM stepson to be charged with money laundering
Malaysia's anti-graft agency says it has detained Riza Aziz, the stepson of former Prime Minister Najib Razak and a Hollywood film producer, and will charge him with money laundering
7:16AM ( 1 day ago )
Tornado in northeast China kills 6 people, injures 190
State media says a tornado in northeast China has killed 6 people and injured another 190
6:58AM ( 1 day ago )
AP Business - Corporate News
Trump calls America's story 'the greatest political journey'
Trump supporters praise his Fourth of July tribute to the US military while his critics accuse him of putting himself center stage on a holiday devoted to unity
8:42AM ( 16 minutes ago )
At Tehran symphony, music lovers seek escape from reality
An evening at Tehran's symphony orchestra offers brief respite from heightened tensions with the United States and punishing economic sanctions
8:35AM ( 23 minutes ago )
Ship with 54 migrants barred from docking in Italy
An Italian humanitarian group barred from docking in Lampedusa said Friday that the conditions of 54 migrants rescued at sea are rapidly deteriorating but there is no boat coming from Malta to allow the migrants' transfer.
8:34AM ( 23 minutes ago )
NATO sees no sign of Russian complying with missile pact
NATO Secretary-General Jens Stoltenberg says Russia shows no sign of respecting a major Cold War-era missile treaty, following talks with the Moscow's envoy less than a month before the pact expires
8:27AM ( 30 minutes ago )
BMW CEO to step down in wake of disappointing earnings
BMW CEO Harald Krueger is stepping down and the company's board will meet this month to discuss a successor
8:19AM ( 38 minutes ago )