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LONDON, June 24 (Reuters) - Britain's competition regulator
has affirmed its provisional clearance of Amazon's purchase of a
16% stake in online delivery group Deliveroo but changed the
basis of its approval, having reviewed submissions from
interested parties, including rivals.
Having provisionally approved the deal in April on the basis
that Deliveroo could go out of business without the Amazon
investment, it said on Wednesday its approval was now
purely on competition grounds.
The Competition and Markets Authority's (CMA) original
clearance and methodology was criticised in submissions by
companies including Just Eat Takeaway and Dominos Pizza.
Amazon led a $575 million fundraising in Deliveroo in May
last year making what the two parties called "a minority
investment" and pitching it against Uber Eats and Just
Eat Takeaway.com in the global race to dominate the market for
meal deliveries.
Having launched an investigation into the deal in December,
the CMA said in April it had become clear that the coronavirus
crisis was damaging Deliveroo's revenues, given the closure of a
large number of the restaurants available through its platform
during the lockdown.
On Wednesday, the CMA said Deliveroo’s finances had shown
considerable recent improvement and it no longer believed it
would exit the market without the Amazon deal.
"Looking closely at the size of the shareholding and how it
will affect Amazon’s incentives, as well as the competition that
the businesses will continue to face in food delivery and
convenience groceries, we’ve found that the investment should
not have a negative impact on customers," said inquiry chair
Stuart McIntosh.
The CMA, however, warned that were Amazon to gain greater
control over Deliveroo, in particular by making a full
acquisition, a further investigation could follow.
It said it would now seek views on its latest findings by
July 10 with a final ruling by Aug 6.
A spokeswoman for Deliveroo welcomed the decision, while a
spokeswoman for Amazon said it was committed to the investment.
(Reporting by James Davey, Editing by Paul Sandle and Emelia
Sithole-Matarise)