UK watchdog gives Amazon-Deliveroo deal tentative approval

Britain’s competition watchdog has provisionally approved Amazon’s plan to buy a stake in food delivery company Deliveroo, saying it would t have a negative impact on customers by reducing choice or raising prices.

Competition and Markets authority approved a deal that will see Amazon take a 16% stake in delivery platform. authority warned it would re-assess if Amazon, which has a dominant presence in online retail, sought to increase its stake furr.

“We’ve carefully considered how this investment could affect competition between two businesses in future,” said CMA’s Stuart McIntosh, who chaired inquiry into deal. “Looking closely at size of shareholding and how it will affect Amazon’s incentives, as well as competition that businesses will continue to face in food delivery and convenience groceries, we’ve found that investment should t have a negative impact on customers.”

investigation was important because it suggested that authorities are giving more scrutiny to expansion of big tech firms. But it was mired in confusion.

While deal h t been billed as a takeover by Amazon, authority wanted to see if agreement could “result in Amazon and Deliveroo ceasing to be distinct.”

Deliveroo described approval as a win for British businesses.

“ mirity investment will enable British born, British bred Deliveroo to compete against well-capitalized overseas rivals and continue to invate for customers, riders and restaurants.″ it said. “As British ecomy recovers from dam caused by COVID-19, a stable regulatory environment is critical. We refore urge CMA to conclude ir review as swiftly as possible.”

Deliveroo’s delivery bikes and scooters are ubiquitous in many major cities, particularly in Europe. Besides Britain, it operates in several countries in region and in Asia, including Germany, France, Italy and Australia.

watchdog is set to make a final decision by Aug. 6.