Delivery Hero and Glovo are being investigated for antitrust violations.
A number of online food, grocery and consumer goods delivery businesses in two Member States have been inspected by the European Commission.
According to a press release, the Commission has concerns that the companies may have violated the Treaty on the Functioning of the European Union.
An alleged agreement or concerted practice to share national markets for the online ordering and delivery of food, groceries and other consumer goods in the European Union is being investigated.
Delivery Hero, a Berlin-based company, was reported to be one of the companies that have been inspected by the commission.
Delivery Hero sent a statement when we contacted them.
Delivery Hero confirms that the European Commission conducted an inspection at its offices in Berlin. The fact that the Commission carries out such an inspection does not mean that the Commission has concluded that there has been an actual infringement of competition law nor does it prejudge the outcome of the investigation itself. Delivery Hero is committed to cooperating fully with the Commission.
Delivery Hero has majority ownership of Barcelona-based Glovo, which was approached by the Commission.
The European Commission has approached Glovo, according to a spokewoman for the company. The initial investigation does not prejudge the outcome of the investigation, as defined by the law. We are helping the European Commission with their investigation.
Germany and Spain are the home markets of Delivery Hero and Glovo, so it makes sense that they were inspected.
We contacted other delivery players in those markets to find out if they had also been paid a visit.
At the time of writing, the group had confirmed that it was not targeted. The European Commission has not targeted the Gorillas, according to a spokesman.
The Commission action did not involve the company.
Flink did not send any requests related to the investigation.
Why Delivery Hero is acquiring a majority stake in Spanish delivery company Glovo
Given that the on-demand delivery space is facing challenging operational conditions, the timing of the inspection is interesting.
The global economic downturn has made it harder for startup to raise money, but the high losses/burn rates of some of these delivery/q-commerce platforms make them look particularly.
As rising interest rates and soaring inflation cause funds to reconsider pouring yet more capital into the sector, there has been a similar rapid cooling of investors on the sector in recent months.
Delivery Hero and Glovo are interesting cases because they both abandoned their solo runs and ended up with a German rival. After 11 p.m., the acquisition was announced. It doesn't seem like they were keen to trumpet the news.
Delivery Hero's shares have taken a battering in recent months, with an April news report quoting HSBC analyst, Andrew Porteous, who wrote that the deal "continues to baffle us".
The on-demand delivery space has been characterized by rapid revisions to operational footprints, with players typically firing up ops across multiple markets as they scramble for scale, before often pulling out again if they judge the level of expenditure has got too high.
A patchwork of brands operating piecemeal across Europe has led to a lack of uniform competition between all operators. In a high-cash-burn environment, dominating the market is necessary. The relative footprints of on-demand delivery players can sometimes appear like coordinated agreements to carve up different markets.
The Commission sniffing around Delivery Hero and Glovo now looks interesting given all these pressures.
The EU emphasizes that the inspections it has carried out so far are a preliminary step into suspected anticompetitive practices, but the two companies are not facing any formal objections at this point.
The Commission says that the fact that it carries out such inspections doesn't mean that the companies are guilty of anti-competitive behavior.
The EU doesn't have a deadline to finish the inquiries. It's not clear whether formal charges will be delivered.
The Commission may offer companies that have been involved in a secret cartel immunity from fines in exchange for reporting conduct and cooperating with an investigation, according to its PR. Individuals are encouraged to use its whistle blower tool to report anti-competitive behavior.
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