Amazon has been facing blockade to invest in online food delivery group Deliveroo in Britain after the country’s competition regulator intervenes into the investment, which is also considering launching a full investigation.
In May, Deliveroo went through a funding round raising $575 million and Amazon came as a leading investor to that that event. Both Amazon and Deliveroo described that funding as “a minority investment” to get a dominating position in the global market of takeaway meal delivery business and to speed up against the Uber Eats in the global race.
Britain’s Competition and Markets Authority, on last Friday, came on saying that it had issued an initial enforcement order (IEO) that was served on both the companies on June 24, which highlights the possibility of authority’s concerns about the transaction.
Referring to Amazon’s investment in Deliveroo as “a minority shareholding”, the regulator said that its suspicion about the transaction is based on the reasonable grounds as it seems that Amazon and Deliveroo have rather come to an end to be different entities; or considering or were putting the arrangements in place that could possibly results in their ceasing to be distinct.
The Amzon and Deliveroo in the IEO was required for now to operate independently which means that the companies cannot go forward with their partnership. The enforcement will provide the regulator with sufficient time to come to a decision of whether to launch “Phase 1” of a formal competition probe.
Amazon is striving entering the takeaway delivery market having a global worth of around $100 billion and after closing its own service Amazon Restaurants, the investment in Deliveroo is the Amazon’s latest attempt to reenter that market which is its first in the UK after a last month attempt in the United States.
Deliveroo said that both the companies were closely working with regulators to get the transaction approved.