EU Investigates Delivery Hero and Glovo Over Food Delivery Cartel Concerns

Breaking News: EU Antitrust Probe Targets Food Delivery Giants

On Tuesday, the European Commission announced a formal investigation into Berlin-based food delivery giant Delivery Hero and its Spanish subsidiary, Glovo. The Commission cited concerns over cartel activity and anticompetitive agreements between the two online delivery firms.

Table of Contents

The Investigation: A Closer Look

According to the Commission’s press release, the investigation will focus on whether Delivery Hero and Glovo engaged in practices that could harm competition in the online food delivery market. Specifically, the Commission is concerned that:

Geographic markets were allocated: The companies may have divided up geographic markets among themselves, limiting competition and choice for consumers.
Commercially sensitive information was shared: The firms may have exchanged confidential data on commercial strategies, prices, capacity, costs, and product characteristics, giving them an unfair advantage over rivals.
Employees were not poached: The companies may have agreed not to hire each other’s employees, stifling innovation and limiting competition.

Background: A Minority Shareholding

Delivery Hero held a minority share in Glovo from July 2018 until acquiring sole control in July 2022. This is the first investigation undertaken by the Commission into anti-competitive agreements that may have occurred in the context of a minority shareholding by one operator in a competitor.

Reactions from Delivery Hero and Glovo

Both companies were contacted for comment on the investigation. A spokesperson for Glovo confirmed the Commission’s probe, stating:

"The investigation does not mean that the European Commission has concluded on an actual infringement of competition law nor does it prejudge the outcome. Glovo will fully cooperate with the European Commission and is committed to meeting all compliance and regulatory requirements."

Delivery Hero also published a response statement, which can be accessed online.

Context: A Fiercely Competitive Market

The online food delivery space has always been highly competitive, with thin margins demanding strategic positioning and a relentless pursuit of market share. The sector has undergone significant changes in recent years, including a brief surge in usage during the 2020-2021 coronavirus pandemic followed by a tough period of correction.

Implications: A Potential €400 Million Fine

Earlier this month, Delivery Hero warned investors that it could face an antitrust fine of up to €400 million over the EU antitrust issue. The Commission’s investigation has significant implications for the company and its stakeholders.