Deliveroo and Amazon hit back at CMA probe
Amazon and Deliveroo have hit back at the Competition and Markets Authority (CMA), calling its investigation flawed.
They have complained that the CMA has failed to “produce any credible evidence of existing competition between Amazon and Deliveroo”.
The watchdog referred the deal to a full investigation in late December, casting doubt on whether the investment will be allowed. It had previously said that a deal between the two companies could cause higher prices and loower quality for consumers.
The first phase of the CMA’s investigation found that Amazon’s investment may give it it the ability to “exercise material influence over Deliveroo.”
The companies have hit back and said there is no evidence of this.
In its initial submission both parties said: “The CMA must show that there is an expectation that Amazon would be able to influence materially Deliveroo’s commercial policy and strategy. There is simply no evidence that Amazon would be able to do this.”
Additionally they have emphasised that it is only a minority investment. Amazon will be entitled to appoint one board director out of eight.
The two companies have also accused the CMA of failing to understand their business models. The CMA have concluded that Amazon and Deliveroo will become important competitors to one another in the future.
Amazon and Deliveroo say they have “fundamentally different operating models, technology and logistics”.
Last week the watchdog said it was opening an investigation into the Just Eat and Takeaway.commerger, which could jeopardise the long-awaited deal.
The CMA expects to issue its provisional findings into the Amazon and Deliveroo probe in mid to late April. The statutory deadline for its final decision is 11 June 2020.
A spokesman for Deliveroo said: “Deliveroo believes the issues raised by the CMA are speculative and not supported by evidence. Amazon and Deliveroo are not and will not become competitors. On the contrary, this minority investment will increase competition in the highly-competitive UK restaurant delivery sector.”
A spokesman for Amazon reiterated: “Amazon believes that this investment funding will lead to more pro-consumer innovation by helping Deliveroo continue to build its world-class service and remain competitive in the restaurant food delivery space”.