Domino’s slams Amazon’s £442m investment in Deliveroo
Pizza takeaway chain Domino’s has slammed a watchdog’s decision to give the go-ahead to Amazon’s £442m investment in Deliveroo, saying the decision will harm competition and consumers.
The Competition and Markets Authority (CMA) provisionally cleared the investment in April over concerns that Deliveroo could collapse without extra financial backing due restaurant closures during the coronavirus crisis.
However, in evidence to the CMA published today, Domino’s said the watchdog had taken “a short-term view unduly influenced by Covid-19”.
“The effect of the transaction is to reinforce the dominance of the Amazon ecosystem and opens up the real possibility of this dominance being leveraged into restaurant home delivery to the detriment of consumers,” Domino’s said.
It added: “Just as Amazon marketplace has become an essential route to market for e-commerce retailers, the same could become true of restaurant and grocery home delivery, with Amazon/Deliveroo controlling the gateway to consumers in the online food delivery sector.”
Pub chain All Our Bars also said the deal could be negative for competition and consumers.
“If they [Deliveroo] have issues with finance, then they should take the routes that the bricks and mortar retailers have had to take and you should not allow Amazon to take dominance in one of the last areas where they do not pervade,” said Paul Wigham, chief executive of the group, which owns pubs across south east England.
The CMA called the situation “wholly unprecedented” but said the cash was “realistically only available from Amazon” when it granted provisional approval to the deal in April.
Restaurants and cafes were closed in late March under coronavirus lockdown orders from the government, impacting Deliveroo’s revenues.
In its response to the CMA today Amazon welcomed the decision but said it was false to claim it would have “material influence” over Deliveroo following the deal.