Amazon gets green light to buy minority stake in Deliveroo

The competition watchdog has given Amazon the green light to buy a minority stake in Deliveroo, just over a year after the proposed deal was originally announced. 

The Competition and Markets Authority said the deal, which will see Amazon buy a 16 per cent stake in Deliveroo for around £442million, ‘will not substantially lessen competition’ in the food delivery market.

But if Amazon tries to buy more of the food delivery firm, a new probe could be launched, the CMA said.  

The CMA started looking at the deal last summer and launched an investigation in December amid fears it could lessen competition.

Then in April, the CMA provisionally approved it after Deliveroo said it could fold if it did not have the support of Amazon because of a hit to its revenues from the coronavirus crisis. 

But shortly after, the CMA reversed the decision, saying Deliveroo was out of the woods after the food delivery market recovered better than expected.  

Officials, therefore, went back to the drawing board to see if the deal would lessen competition. It has now made its final decision.  

The CMA’s inquiry chair Stuart McIntosh said: ‘When looking at any merger, the CMA’s role is to assess whether consumers will lose out from a substantial lessening of competition.

‘We have not found this to be the case given the scale of Amazon’s current investment, but if it were to increase its shareholding in Deliveroo, that could trigger a further investigation by the CMA.’ 

Deliveroo said it was ‘delighted’ by the CMA’s decision, and the fact the process had come to an end.

It added: ‘British-born Deliveroo will use the investment to increase choice and value for customers, support for restaurants and will be able to offer more riders the flexible work they value as the company expands.’