EU launches antitrust investigation against Delivery Hero and Glovo

Delivery Hero and its Spanish subsidiary Glovo are currently being investigated by the European antitrust authority.

The European Commission announced on Tuesday (23 July) that it would investigate whether the relationship between the two online food delivery companies violates competition law.

The EU Commission expresses concern that the two companies may have divided geographic markets and exchanged confidential information on things like business strategies and costs before Delivery Hero’s takeover of Glovo in 2022 – the company acquired a minority stake in 2018.

In addition, the EU Commission wants to determine whether the companies have agreed not to poach each other’s employees.

“Online grocery 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 markets and not poach each other’s employees,” said Margrethe Vestager, the competition authority’s vice-president responsible for competition policy.

“If confirmed, such behaviour could constitute a breach of EU competition rules and potentially have a negative impact on prices and choice for consumers, as well as on opportunities for workers.”

The EU Commission raided the two companies in 2022 to investigate whether they were part of a “cartel,” a group of independent companies that agree among themselves to fix prices, limit production, or divide markets or customers.

Germany-based Delivery Hero confirmed the investigation in a statement on its website.

“The opening of an investigation does not mean that the European Commission has concluded whether an actual infringement of competition law has occurred, nor does it prejudge the outcome,” the company said. “Delivery Hero is fully cooperating with the European Commission and is committed to meeting all compliance and regulatory requirements.”

The news comes weeks after Delivery Hero warned that it could face a “significant” antitrust fine of $433 million as a result of the investigation and that the company had increased its corresponding provision.

Elsewhere in the delivery space, PYMNTS spoke with Craig Whitmer, vice president of new business at Grubhub, last week about how his company’s nationwide grocery partnership with Albertsons is part of a larger plan to become a major player in the space.

“The early results are incredibly positive for overall company growth and strengthen our core restaurant business even more,” Whitmer said. “… We know what we need to do to catch up with our competitors. We’re almost behind in this area. But I’m confident we’ll catch up very, very quickly.”