LONDON: Amazon has received approval to purchase a 16 per cent stake in online delivery group Deliveroo, following a provisional nod in June.
Britain's Competition and Markets Authority gave the clearance on Tuesday (Aug 4) after a 15-month investigation, saying that Amazon's minority investment in the London-based Deliveroo “will not result in a substantial lessening of competition in either restaurant delivery or convenience grocery delivery".
The original clearance in April was on the basis that Deliveroo could go out of business without the Amazon investment. It changed approach to focus on competition after criticism from rivals including Just Eat Takeaway and Domino's Pizza.
"Today's final decision is the result of a thorough examination of this deal and the markets in which Amazon and Deliveroo operate," said Stuart McIntosh, the inquiry chair.
Amazon led a US$575 million fundraising in Deliveroo in May 2019, which the parties called "a minority investment".
The Amazon investment will bolster Deliveroo in the global race with Uber Eats and Just Eat Takeaway.com to dominate the market for meal deliveries.
Deliveroo works with 100,000 restaurants on its platform globally. This year alone, 30,000 restaurants joined its platform, underlining the extent to which the COVID-19 crisis has seen food and beverage operators turn to delivery as a vital source of revenue.
The funds would allow Deliveroo to offer a "hyper-personalised" service to customers, expand its delivery-only kitchens and develop new technology to help restaurant partners, it said.
"We are delighted that the CMA has concluded its 15-month investigation and that the Amazon minority investment can now go ahead," said Ms Sarah Tan, interim general manager at Deliveroo Singapore.
“This is fantastic news for Singapore customers and restaurants, and for the Singapore economy. Deliveroo will use the investment to increase choice and value for customers, support for restaurants and will be able to offer more riders the flexible work they value as the company expands," she added.