Delivery Hero and its Spanish unit Glovo are under investigation by Europe’s antitrust watchdog.
The European Commission (EC) announced Tuesday (July 23) that it will probe whether the relationship between the two online food delivery companies violates competition law.
The EC says it is concerned that before Delivery Hero acquired Glovo in 2022 — it had purchased a minority stake in 2018 — the two companies may have divided up geographic markets and shared sensitive information on things like commercial strategies and costs.
In addition, the EC wants to determine if the companies agreed not to poach each other’s employees.
“Online food delivery is a fast-growing sector, where we must protect competition. This is why we are investigating whether Delivery Hero and Glovo agreed to share markets and not to poach each other’s employees,” said Margrethe Vestager, the competition’s executive vice president in charge of competition policy.
“If confirmed, such conduct may amount to a breach of EU competition rules, with potential negative effects on prices and choice for consumers and on opportunities for workers.”
The EC had raided the two companies in 2022 as part of an investigation into whether they were in a “cartel,” a term for a group of independent companies that agree to fix prices, place limits on production or share markets or customers.
Germany-based Delivery Hero acknowledged the investigation in a statement on its website.
“The opening of an investigation does not mean that the European Commission has concluded on whether an actual infringement of competition law may have 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 due to the investigation, and that it had increased its corresponding provision.
Elsewhere in the delivery space, PYMNTS spoke last week with Craig Whitmer, vice president of new verticals at Grubhub, about the way 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 growth for a business, and it gets our core restaurant business, even stronger,” Whitmer said. “… The thing is, we know what we need to do to get on par with our competitors. We’ve been almost later in this space than others have. But I feel confident we’ll catch up very, very quickly.”
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