EU opens probe into possible online food-delivery cartel

Eurocorps soldiers carry a European Union flag during the flag-raising ceremony on the eve of the inaugural session of new European Parliament in front of Louise Weiss building, headquarters of the European Parliament in Strasbourg, eastern France, on July 15, 2024. (Photo by FREDERICK FLORIN / AFP)

Brussels — The EU launched an investigation on Tuesday to determine whether online food-delivery companies Delivery Hero and Glovo engaged in anti-competitive practices.

The probe comes after surprise raids at the firms, which are two of the largest food delivery companies in Europe, in June 2022 and November 2023.

READ: Food deliveries to workplaces up as firms ditch WFH setup

Delivery Hero, based in Germany, held a minority share in Spanish company Glovo from July 2018 before becoming the German online app’s subsidiary in July 2022.

The European Commission is concerned that before the takeover, the two companies “may have allocated geographic markets and shared commercially sensitive information (e.g., on commercial strategies, prices, capacity, costs, product characteristics)”, it said.

Delivery Hero’s then minority share could have “facilitated” these practices.

The commission said the probe was part of the powerful EU competition regulator’s “efforts to ensure that online food delivery and the groceries sector deliver choice and reasonable prices to consumers”.

The EU is also suspicious the firms agreed not to poach each other’s workers, and said this probe was the first on “no-poach agreements formally initiated by the Commission”.

READ: Jollibee probes alleged data breach affecting 32 million customers

“This investigation is also part of the Commission’s efforts to ensure a fair labour market where employers do not collude to limit the number and quality of opportunities for workers but compete for talents,” it added.

The opening of a probe does not prejudge its outcome and there is no deadline for the investigation to be completed. The companies risk fines if found at fault.

“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,” said the EU’s competition chief, Margrethe Vestager.