There is a certain level of irony in the fact that as America wrapped up celebrating its independence from Great Britain, British regulators were clamping down on one of America’s most influential companies.
The Guardian reports that Amazon’s recent minority investment in UK-based food delivery service, Deliveroo, is now being scrutinized by the UK government’s Competition and Markets Authority (CMA).
There were “reasonable grounds,” according to the CMA, to suspect that Amazon and Deliveroo could “cease to be distinct.” The CMA has ordered that any further integration between the two companies must be paused as the government investigates whether any competition rules were broken and determines whether it will launch a full merger inquiry.
Amazon was part of a $575 million Series G round of investment in Deliveroo earlier this year. The investment came after Amazon failed to gain any traction for its Amazon Restaurants delivery service in Britain, and shut it down.
With the CMA order, Deliveroo is prohibited from engaging in activity that “could lead to its integration into Amazon’s business while the regulator makes its decision,” reports The Guardian. This includes changes to big contracts or senior management without permission from the CMA.
The CMA’s move is part of a larger backlash growing against Amazon, whose massive size and influence has spooked state and city regulators here in the U.S. In May, under growing pressure from multiple city governments, Amazon dropped its no-cash accepted policy at its nascent chain of Go stores. And at the beginning of the year, Amazon decided to abandon plans to build a second HQ in New York after facing protests from lawmakers and activists there.
In another bit of irony, while the CMA’s move against Amazon serves to protect competition in the UK, we at The Spoon saw Amazon’s investment in Deliveroo actually as a way for the two companies to meaningfully break into the U.S. market.
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