The European Commission has opened an investigation into possible anticompetitive agreements in the online food delivery sector. The formal antitrust investigation is to determine whether two of Europe’s largest food delivery companies – Delivery Hero and Glovo – have been in breach of EU competition rules by participating in a cartel manipulating the online ordering and delivery of food, groceries and other daily consumer goods in the European Economic Area (EEA).
From July 2018, Delivery Hero held a minority share in Glovo, before acquiring sole control of the latter four years later in 2022. In June 2022 and November 2023, the Commission conducted unannounced inspections at the premises of Delivery Hero and Glovo, as part of a self-initiatived inquiry into possible collusion in the food delivery sector.
The EC seeks to establish whether before the takeover, the two may have allocated geographic markets and shared commercially sensitive information related to commercial strategies, prices, capacity, costs, product characteristics etc. Also of concern, is whether the two companies might have agreed not to poach each other’s employees. Such practices could have benefited and been facilitated as a result of Delivery Hero’s minority share in Glovo.
If proven, the companies’ behaviour could be in breach of EU competition rules prohibiting the establishment of cartels as well as restrictive business practices, which are banned under Article 101 of the Treaty on the Functioning of the European Union (TFEU) and Article 53 of the EEA Agreement.
While the EC has prioritised an in-depth investigation, opening a formal investigation in now way prejudges the outcome.
The investigation is part of EC efforts to ensure that online food delivery and the groceries sector offer choice and reasonable prices to consumers. A young and dynamic market such as this could be susceptible to anticompetitive agreements and restrictive business practices, including cartels through market allocation, which could result in camouflaged market consolidation and have potentially negative effects on competition.
The current investigation is part of the EC drive to ensure a fair labour market where employers do not collude to limit the number and quality of opportunities for workers but instead compete for talents. This is the first investigation based on no-poach agreements to be formally initiated by the EC. It is also the first by the EC into anti-competitive agreements that may have occurred in the context of a minority shareholding by one operator in a competitor.
Delivery Hero, headquartered in Germany, is currently active in more than 70 countries worldwide and partners with more than 500,000 restaurants. Delivery Hero is listed on the Frankfurt Stock Exchange. Glovo, headquartered in Spain, is also in the food ordering and delivery business and currently operates in more than 1,300 cities in 25 countries. In July 2022, Delivery Hero acquired the majority of shares in Glovo, and Glovo became its subsidiary.
