European Commission opens formal antitrust investigation into Delivery Hero and Glovo

4 months ago 31

The European Commission opened a formal antitrust investigation into food delivery apps Delivery Hero and Glovo, examining whether the two are participating in a cartel, according to a Tuesday (23 July) press release.

The two companies are among Europe’s largest in the food delivery sector. Germany’s Delivery Hero has been the effective owner of Barcelona-based Glovo since July 2022. Before that, Delivery Hero owned a minority stake at Glovo.

The Commission is examining whether the two were participating in a cartel prior to the full acquisition, the press release said.

It is the latest in a series of antitrust investigations initiated by the Commission in the technology sector.

Most recently, it accused Microsoft of breaking antitrust rules for bundling its Teams app in June. In March, it doled out its third-largest antitrust fine to Apple over the company’s practices around music streaming apps. Apple is contesting the fine.

Facilitated by the minority stake, “Delivery Hero and Glovo may have allocated geographic markets and shared commercially sensitive information (e.g., on commercial strategies, prices, capacity, costs, product characteristics). The Commission is also concerned that the companies may have agreed not to poach each other’s employees,” the Commission said.

If the allegations are proven, the activity may be in breach of EU competition rules that ban cartels and restrictive business practices, the Commission said. Delivery Hero said earlier in July it expects a €400 million fine, following raids in 2022 and 2023 in its offices.

Listed on the Frankfurt stock exchange, Delivery Hero currently has a market capitalisation of €5.32 billion.

Delivery Hero offers services in over 70 countries in Africa, Asia, Europe, the Middle East, and Latin America, according to its 2023 earnings report. It increased its stake in Glovo to 94.5% of shares in July 2022, valuing the company at €2.3 billion at the time.

In 2023, it bought more Glovo shares, and at the end of last year, it owned 99.2% of all Glovo shares.

The Delivery Hero Group owns more than 307 subsidiaries as of the end of 2023.

More than half of Delivery Hero Group’s gross merchandise value, a measure of the value of the goods sold through its app, comes from Asia, according to its financial report.

[Edited by Zoran Radosavljevic]