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CMA puts brakes on Amazon-Deliveroo deal

Amazon and Deliveroo have been ordered to pause any integration efforts, following the eCommerce titan's recently announced investment in the food delivery platform.

The Competition and Markets Authority (CMA) has today (5 July) issued an enforcement order against the companies as it considers whether a full merger inquiry is required.

The CMA has given no set deadline on whether it will launch the full inquiry, but has put the brakes on any Amazon-Deliveroo integration for now via an initial enforcement order which strictly lays out how the two companies must interact during the interim period.

In the document, the CMA said it had “reasonable grounds for suspecting that it is or may be the case that Amazon.com, Inc (Amazon) and Roofoods Ltd, trading as Deliveroo (Deliveroo), have ceased to be distinct; and/or that arrangements are in progress or in contemplation which, if carried into effect, will result in Amazon and Deliveroo ceasing to be distinct”.

Deliveroo announced in May that Amazon was leading a new $575 million Series G preferred shared funding round.

The investment would give Amazon an influential share in the business and Deliveroo said the funding would help it improve its platform, offer more work for riders, and help partner restaurants to grow their businesses by reaching new customers.

Amid the instructions issued by the CMA as it considers whether there are grounds for a full inquiry were clear demands around IT and customer data.

The two businesses have been informed that there must be no integration of their technology, and “the software and hardware platforms of the Deliveroo business shall remain essentially unchanged, except for routine changes and maintenance”.

The customer and supplier lists of both organisations must continue to be operated separately and “any negotiations with any existing or potential customers and suppliers in relation to the Deliveroo business will be carried out by the Deliveroo business alone”, according to the CMA.

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