The Competition and Markets Authority (CMA) today cleared the Amazon’s 16 per cent investment in online food delivery company Deliveroo following its phase two in-depth investigation.
The regulator has earlier provisionally cleared the deal twice, based on different findings, during the course of the phase two investigation.
The CMA said it has taken the final decision to clear the deal after finding that the level of investment by Amazon will not substantially lessen competition in the restaurant delivery and online convenience grocery delivery markets in the coming years.
“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,” said Stuart McIntosh, chair of the inquiry panel.
The watchdog referred the deal for an in-depth phase two investigation in December last year after the initial investigation found a ‘realistic prospect’ to harm competition by discouraging Amazon from re-entering the online restaurant food market or further developing its presence in the online convenience grocery delivery market in the UK.
However, the agency has given its first provisional clearance in April this year considering the impact of the COVID-19 pandemic on Deliveroo. However, it has revised the finding in June after reviewing Deliveroo’s finances from April, but kept its decision to provisionally clear the deal intact.
The CMA noted that it applies different thresholds as to the likelihood of a substantial lessening of competition at each phase of its merger assessment.