An investigation into the proposed tie-up between Amazon and food delivery app Deliveroo is “speculative and not supported by evidence”, the businesses have warned the CMA.
Deliveroo and Amazon are set to issue a joint submission to the Competition and Markets Authority (CMA) sometime this week, which will accuse the competition watchdog of misunderstanding the UK’s food market according to Sky News.
In particular it will highlight that Amazon, which stopped delivering takeaway in 2018, has no plans to re-enter the sector itself.
The joint submission will also argue that the CMA’s decision to investigate the tie-up fails to take into account the different business models employed by Deliveroo and Amazon, and will dispute the watchdog’s suggestion the ecommerce giant would exert “material influence” over the food delivery app by investing.
The CMA announced it would be launching an in-depth investigation into Amazon’s investment in Deliveroo in late December.
The watchdog said concerns centred on the terms of the deal and questioned whether “enterprises carried on by Amazon.com will cease to be distinct from enterprises carried on by Roofoods Ltd [Deliveroo]” and “whether the creation of that situation may be expected to result in a substantial lessening of competition within any market or markets in the UK for goods or services”.
The investigation and subsequent report are scheduled to be completed by June 11, 2020.
The CMA very prominently scuppered the proposed tie-up between big four grocers Sainsbury’s and Asda last year, a decision which was heavily criticised by both supermarket chains.
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