Amazon may have quietly closed down its food delivery business, but at the same time, it announced that it had decided to invest a substantial sum in the UK food delivery company Deliveroo. However, it has now emerged that the deal is going to be probed by the antitrust agency in the UK for any possible breach. It has also been reported that the agency could even take the ultimate step and actually block the deal altogether if it finds that the transaction is in breach of the country’s antitrust laws.
Over the years, it has become abundantly clear that the antitrust regulators in Europe are known for putting their foot down if they believe that a company has indulged in anti-competitive practices. The probe into Amazon’s investment is the latest in a long line of such probes from European regulators. On Wednesday, the Competition and Markets Authority started their probe into Amazon’s investment in Deliveroo. It was back in July that the agency had announced that it was probing the deal that had seen Amazon making a substantial investment in the hugely popular food delivery start-up. Amazon has had an eventful year so far, and in addition to this investment, it had also announced a $700 million package for upskilling its own employees.
Deliveroo is the biggest player in the food delivery space in the UK, and its motorcycles are a common sight in many parts of the country. However, the company is now trying to expand into new markets in a big way, and hence the investment from Amazon must have come as a godsend. It has already started operations in South-Asia and in other European countries. If they are to make a dent in those markets, the company would need vast amounts of capital, and hence, if this deal is blocked, then the company could be in a bit of trouble.