The CMA provisionally authorises the merger, noting that the circumstances with the coronavirus pandemic played a role in the decision.
Background: The UK’s Competition and Markets Authority (CMA) started scrutinising Amazon’s investment in Deliveroo in July 2019. Back then, the authority said it suspected Amazon and Deliveroo were no longer separate companies, or were at least making arrangements for a merger. In October 2019, the CMA decided to launch a full inquiry into the merger. After the first phase, it concluded that the deal could damage competition in the markets for online restaurants food delivery and online convenience grocery delivery.
COVID-19 changes the CMA’s mind: On 17 April 2020, the CMA issued a statement saying that, while it had continued to investigate the concerns in Phase 2 of its inquiry, it had become aware that the coronavirus pandemic has had a significantly negative impact on Deliveroo’s business. The ongoing lockdown in the UK has resulted in the closure of a large number of the key restaurants available through Deliveroo, and a significant decline in revenues. Having received evidence from Deliveroo, the CMA concluded that Deliveroo’s exit from the market would be inevitable without access to significant additional funding, which only Amazon would be able to provide at this time. The CMA currently considers that the imminent exit of Deliveroo would be worse for competition than allowing the Amazon investment to proceed and has therefore provisionally found that the deal should be cleared.
Next steps: The CMA’s decision is not yet final, as the authority is now seeking comments on it until 11 May 2020, and will assess any further evidence before making a final decision. The deadline for the final report is 11 June 2020.
