Rivals lambast CMA’s provisional findings on Deliveroo–Amazon tie-up

The CMA has twice provisionally cleared the proposed investment into Deliveroo by Amazon. First in April, on the basis that the forced closure of many high street restaurants, due to the coronavirus, had left the food delivery app on the brink of failing.

The watchdog found in favour of the tie-up again in late June when it argued that the proposed 16% stake the etail giant was after wasn’t large enough to lessen competition in the market.

However, a number of food retailers and other stakeholders in the sector, have repeatedly provided evidence to the CMA against the merger. 

The competition watchdog today published the latest submissions from six such businesses, as well as Deliveroo and Amazon. 

Submissions from the six rival businesses, including high street pizza chain Domino’s and delivery app Just Eat, have heavily criticised the CMA’s most recent findings. 

All questioned the veracity of the watchdog’s claims that a 16% stake in a business wasn’t large enough to sway its decision-making or lead to a lessening of competition. 

As one retailer wrote: “It is illogical to conclude that the rights and stake confer a degree of control sufficient to bring the transaction within the bounds of the merger control regime; but simultaneously insufficient to affect the acquirer’s incentives and ability to influence the strategic policy of the target.”

Another rival took issue with the CMA’s assertion that, should Amazon look to increase its 16% stake in the future, it would look to reopen another investigation. 

They said: “Having concluded that Amazon’s acquisition of a 16% shareholding is sufficient to confer material influence, the CMA will not have jurisdiction to consider any further increases in Amazon’s stake” unless the etail giant were to push for a controlling stake. 

Another rival questioned what would happen should Deliveroo float on the UK or European stock markets, or transfer its headquarters from London to the US. “How can the CMA stop Amazon from providing Deliveroo with benefits from its vast financial, data and logistical resource bank?”

Domino’s submission said that “the CMA’s substantive assessment is incomplete and unsafe” and accused the watchdog of making numerous errors in applying the letter of competition law.

The CMA is set to publish its final findings into the proposed merger by August 6.