Amazon is in the focus of the ire of Britain’s competition and antitrust watchdog after the latter said that the company failed to address several critical issues regarding its purchase of a minority stake in the UK’s biggest food delivery service provider, Deliveroo. The watchdog thinks that the deal could potentially curtail fair competition in the industry.
In a twitter post, the Competition & Markets Authority said that Amazon failed to clear out some of the issues it had raised before the deadline that the agency set.
“Amazon has failed to address our initial concerns that their investment in Deliveroo could be bad for customers, restaurants, and grocers,” says the Twitter post.
The agency has ordered the e-commerce giant to respond to its questions and concerns before the December 18 deadline. Because of the failure of the company to do so, the competition watchdog said that they will now proceed on phase 2 of its investigation against the company and its deal with Deliveroo.
“The deal will now be referred for an in-depth, Phase 2, investigation,” the watchdog added in the tweet.
Following its failed venture in the takeout and food delivery niche in the United Kingdom, Amazon decided to join its competition Deliveroo and take on the likes of Uber Eats and GrubHub. The company became the biggest investor in the latest $575 million Deliveroo funding round, reportedly acquiring a 16 percent stake in the delivery service company.
Because of the deal, the CMA fears that Amazon and Deliveroo would “cease to be distinct” or merge in the future, which could, theoretically, lead to customers facing higher prices or lower-quality services.
In a statement, an Amazon spokesperson argues that the two companies should be allowed access to investors.
“A homegrown UK business like Deliveroo should have broad access to investors and supporters. Amazon believes that this investment funding will lead to more pro-consumer innovation by helping Deliveroo continue to build its world-class service and remain competitive in the restaurant food delivery space by creating more highly skilled jobs, innovating in the restaurant food delivery sector, and developing new products for customers,” the spokesperson said.
