The European Union (EU) has initiated an investigation into two major online food-delivery companies, Delivery Hero and Glovo. This inquiry, announced on Tuesday, aims to determine whether these firms engaged in practices that could breach EU competition laws.
The probe follows a series of surprise raids conducted at Delivery Hero and Glovo’s offices in June 2022 and November 2023. These raids have raised concerns about possible anti-competitive behavior involving market allocation and the sharing of commercially sensitive information between the two companies. The European Commission’s investigation is particularly focused on whether Delivery Hero and Glovo engaged in practices such as dividing geographic markets or exchanging information on commercial strategies, pricing, and other crucial aspects of their business operations.
Delivery Hero, headquartered in Germany, acquired a minority stake in Glovo, a Spanish food delivery company, in July 2018. By July 2022, Delivery Hero had fully integrated Glovo as a subsidiary. The Commission’s inquiry suggests that the minority stake held by Delivery Hero might have facilitated anti-competitive practices between the two firms prior to this takeover.
The European Commission’s investigation is driven by concerns over maintaining a competitive market that ensures consumers have access to a range of choices and reasonable prices. Margrethe Vestager, the EU’s competition chief, emphasized that the investigation is also part of broader efforts to ensure fair competition in the labor market. The Commission suspects that the companies may have agreed not to poach each other’s employees, a practice known as “no-poach agreements,” which the Commission is scrutinizing as part of its commitment to fostering fair labor practices.
This investigation represents a crucial step in the EU’s efforts to scrutinize anti-competitive behavior in the online food delivery sector. If the investigation confirms that Delivery Hero and Glovo engaged in illegal practices, they could face significant fines. Such outcomes would underscore the EU’s commitment to enforcing competition rules and promoting fairness in both consumer markets and employment opportunities.
It is important to note that the initiation of an investigation does not imply any presumption of wrongdoing. The Commission will conduct a thorough examination before reaching any conclusions. There is no set deadline for the investigation’s completion, and the outcome will depend on the evidence gathered during the inquiry.
The potential implications of this probe are substantial. A finding of anti-competitive behavior could impact the operational dynamics of online food delivery services in Europe, affecting prices and choices for consumers. Additionally, it could influence labor market practices by highlighting the importance of competition for talent and fair employment practices.
As the investigation progresses, stakeholders in the online food delivery industry and the broader market will be watching closely to see how this case unfolds and what measures, if any, will be taken to address any identified anti-competitive practices.
