Yahoo Finance Amazon and Deliveroo face investigation as deal put on hold
Amazon and Deliveroo are under investigation in a competition probe after a watchdog put the shopping giant’s deal for a stake in the delivery firm on hold.
The UK’s Competition and Markets Authority (CMA) told the companies to pause any integration of the two companies in the UK, using a power known as an initial enforcement order.
Amazon snapped up a stake in Deliveroo in May, with a £457m ($575m) deal announced as it tries to conquer the takeaway food market.
The order forces the companies to keep the companies separate while the authorities decide whether to launch a full investigation into any possible breaches of competition rules.
A spokesman for Deliveroo said: “Deliveroo and Amazon have been working closely with regulators to obtain regulatory approvals.
“There are a number of major companies within the restaurant food delivery sector and this investment will enable Deliveroo to expand, innovate and, we believe, will enhance competition. This investment will help create jobs, help restaurants to grow their businesses and will improve choice for consumers.”
The announcement could prove a headache for Amazon, which also celebrates its 25th birthday today.
The deal had previously sparked controversy, with critics wary of Amazon’s intentions.
Tom Watson, deputy leader of the opposition Labour party, had dubbed the purchase a “land grab,” and claimed Amazon was obsessed with “extracting billions through monetising our personal data.”
