In a bold move to safeguard competition in the booming online food delivery market, the European Commission has launched a formal antitrust investigation into two of Europe’s largest food delivery companies, Delivery Hero and Glovo. The investigation could have significant implications for consumers and workers across the European Economic Area (EEA).
What is happening?
The European Commission is investigating whether Delivery Hero and Glovo engaged in cartel-like conduct, potentially involving the division of geographic markets and the sharing of sensitive business information such as pricing strategies and operational capabilities. In addition, there are concerns that the two companies may have agreed not to poach each other’s employees, a practice that could stifle job opportunities and wage growth for workers in the sector.
The companies in question
Delivery Hero: Based in Germany, this company operates in over 70 countries and partners with over 500,000 restaurants. It is listed on the Frankfurt Stock Exchange. Glovo: Based in Spain, Glovo operates in over 1,300 cities across 25 countries. In July 2022, Delivery Hero acquired a majority stake in Glovo, making it a subsidiary.
Why is this important?
The online food delivery market is growing rapidly and ensuring fair competition is essential to maintain reasonable prices and diverse choices for consumers. Margrethe Vestager, Executive Vice-President of the European Commission in charge of competition policy, stressed the importance of this investigation:
“Online food delivery is a fast-growing sector, where we need to protect competition. That is why we are investigating whether Delivery Hero and Glovo have agreed to share their markets and not poach each other’s employees. If confirmed, such behaviour could constitute a breach of EU competition rules, with potential negative effects on prices and choice for consumers as well as opportunities for workers.”
Background and next steps
The Commission’s concerns arise from Delivery Hero’s minority stake in Glovo from July 2018 until its full acquisition in July 2022. During this period, the companies may have engaged in practices that were contrary to EU competition rules, in particular Article 101 of the Treaty on the Functioning of the European Union (TFEU) and Article 53 of the EEA Agreement.
The investigation follows unannounced inspections at the companies’ premises in June 2022 and November 2023. These inspections were part of a wider investigation into potential collusion in the food delivery sector.
Implications for the market
This investigation is particularly important as it is the Commission’s first formal investigation into no-poaching agreements and anti-competitive practices involving minority shareholdings. If proven, these allegations could lead to substantial changes in the way companies operate in the online food delivery market, ensuring a more competitive environment that benefits both consumers and workers.
And after?
The Commission will conduct a thorough investigation, which will be a priority but without a deadline. The duration will depend on various factors, including the complexity of the case and the level of cooperation of the companies involved.
For those interested in the finer details of the Commission’s actions against cartels and how to report suspicious behaviour, further information is available on the Commission’s dedicated cartels website. Updates on this investigation will be published on the Commission’s competition website under case number AT.40795.
As this investigation unfolds, it will be crucial to monitor its impact on the online food delivery market and its broader implications for competition policy in this sector. Europe. This case could set a precedent for how similar issues will be handled in the future, ensuring a fair and competitive market for all.
