Amazon & Deliveroo slapped with enforcement order over potential breach of UK competition rules

Amazon and Deliveroo are under investigation by the UK competition watchdog after Jeff Bezos’ company bought a stake in the food delivery business, raising concerns that the companies could be planning to merge.

The Competition and Markets Authority ordered the companies to pause any integration efforts pending the investigation, which it said would be looking into any potential breaches of competition rules.

The CMA said it had “reasonable grounds for suspecting” Amazon and Deliveroo’s ‘Roofoods’ have “ceased to be distinct” or were planning to merge. The watchdog will decide whether to hold a full merger inquiry. 

Deliveroo secured $575 million in funding from Amazon and other investors in June, so that it could execute plans to expand in the UK to reach 50 percent of the population by the end of the year. The news caused shares in Deliveroo’s competitors like Just Eat to fall. 

Amazon was forced to end its own attempt at a food delivery service, Amazon Restaurants UK, after it failed to get market share in December.  

“Deliveroo and Amazon have been working closely with regulators to obtain regulatory approvals,” a Deliveroo spokesperson said, adding that the investment will enable the company to “expand, innovate and, we believe, will enhance competition.”

Amazon said its investment would help Deliveroo to “expand its services, benefiting consumers through increased choice and creating new jobs.”

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