The European Commission announced a formal investigation into Berlin-based food delivery giant Delivery Hero and its Spanish subsidiary Globo on Tuesday, citing cartel concerns. The Commission will launch a thorough investigation into contracts between online delivery companies to check whether anti-competitive practices are taking place.
“The Commission is concerned that prior to the acquisition, Delivery Hero and Globo may have allocated geographic markets and shared commercially sensitive information (e.g. commercial strategies, pricing, production capacity, costs and product attributes),” the Commission said in a press release. “The Commission is also concerned that the companies may have agreed not to poach each other's employees. These actions may have been facilitated by Delivery Hero's minority stake in Globo.”
The move follows unannounced searches of the companies' local offices in July 2022 and November 2023.
According to the European Commission, Delivery Hero has held a minority stake in Globo since July 2018 and gained sole control in July 2022. The Commission noted that this is the first investigation it has conducted into anti-competitive agreements “that may arise in situations where one undertaking holds a minority stake in a rival company.”
Delivery Hero and Glovo were contacted for responses to the survey.
A Glovo spokesperson confirmed the European Commission's investigation, adding: “This investigation does not mean that the European Commission has concluded actual violations of competition law, nor does it prejudge its outcome. Glovo will cooperate fully with the European Commission and is committed to meeting all compliance and regulatory requirements.”
Delivery Hero has issued a similar response statement, which can be viewed online here.
Earlier this month, the German delivery giant warned investors that it could ultimately face fines of up to 400 million euros over EU antitrust issues.
The online food delivery space has always been fiercely competitive, with low profit margins demanding strategic positioning and a race to secure the top (or second) position in the market and have a chance to build a viable business.
On top of that, after a temporary surge in usage of food delivery apps during the coronavirus pandemic in 2020 and 2021, the sector has been going through a tough adjustment period with a wave of consolidation, market withdrawals, layoffs and startup closures.
This report has been updated with a link to a statement from Delivery Hero.