Amazon's Deliveroo deal in doubt after UK regulator raises serious concerns

[December 11, 2019]  LONDON (Reuters) - Britain's competition regulator said on Wednesday Amazon's purchase of a stake in online food delivery group Deliveroo raised "serious competition concerns" for consumers that may require an in-depth investigation.

A biker, wearing a Deliveroo t-hirt, demonstrates during a call on clients to boycott the brand in Paris, France, August 7, 2019. REUTERS/Charles Platiau

Amazon led a $575 million fundraising in Deliveroo in May, making what the two parties called "a minority investment" and going up against Uber Eats, Just Eat and Takeaway.com in the global race to dominate the market for takeaway meal deliveries.

After completing a "Phase 1" probe, the Competition and Markets Authority (CMA) said it would proceed to an in-depth investigation if Amazon and Deliveroo failed to offer legally-binding proposals that addressed its concerns.

The CMA's initial probe found that the investment, in its current form, could harm competition in two ways.

Firstly, the regulator is concerned that the deal could damage competition in online restaurant food delivery by discouraging Amazon re-entering a market it exited last year.

Secondly, the CMA said the deal could damage competition in the emerging market for online convenience grocery delivery, where Amazon and Deliveroo have already established market-leading positions.

The CMA has given the two companies five working days to present their proposals. The regulator would then have five working days to consider whether to accept their offer instead of referring the case to an in-depth probe.

(Reporting by James Davey, Editing by Paul Sandle)

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