MP wants UK competition authority to investigate Amazon’s Deliveroo stake

MP wants UK competition authority to investigate Amazon’s Deliveroo stake

European restaurant delivery giant Deliveroo this morning announced that Amazon would be gobbling up a share in the company, by leading a new $575 million round of funding in it.

But it looks like the e-commerce giant may be facing a little indigestion ahead.

Tom Watson, MP and deputy leader of the Labour Party, today announced that he will be asking the UK’s Competition and Markets Authority (CMA) to investigate the investment, opening the door to either imposing stronger conditions on the deal, or blocking it outright.

“It’s called surveillance capitalism,” he said today of Amazon’s approach to how it uses data from customers to build and sell products. “It’s a digital dystopia, and I shall be writing to the Competition and Markets Authority demanding they launch an investigation into this ‘investment.'”

Advertisement
GamersGate Download games for PC and Mac now

We have contacted Watson directly to elaborate on which violation(s) he would cite in the referral and we will update as and when we hear back. Areas that the CMA might investigate could involve whether the deal would result in unfair competition, or a misuse of data.

Watson’s announcement came via a series of tweets on Twitter, in which he laid out his concerns in more detail. His words are a concise take on the key to Amazon’s business model: its focus on Deliveroo is not just to invest in new services to expand its e-commerce and logistics business, but to leverage the data generated in one operation to grow other parts of its business, too.

“Deliveroo’s CEO Will Shu welcomes a land grab by Amazon because ‘it is such a customer-obsessed organisation,'” he said, citing an interview Shu gave to the BBC about the investment. “He’s right, Amazon is obsessed. Obsessed with tracking tools, micro-targeted ads, extracting billions through monetising our personal data.

“They don’t want to get their mighty claws on a food delivery system. They want Deliveroo’s tech and data. They don’t just want to know how you eat, what you eat, when you eat. They want to know how best to extract your cash throughout your waking and sleeping hours.”

The CMA — and regulators in general — have had a mixed record when it comes to putting the foot down on large deals. On one hand, in the past European reguators approved major takeovers by Facebook of Instagram and Whatsapp — takeovers that now many are now questioning. On the other, it recently moved to block a $10 billion acquisition of Walmart’s ASDA by Sainsbury’s — effectively kicking the deal into touch.

Advertisement

The difference between these past cases and Amazon/Deliveroo is that the latter is an investment rather than an outright acquisition. However, there is an argument to be made that one can lead to the other, specifically in this case.

In September 2018, it was reported that Amazon had made at least two attempts to acquire Deliveroo, around the same time that Uber was also considering a bid for the company to bolster its Uber Eats business. (Deliveroo and Uber Eats have been in protracted competition to dominate higher-end, app-based food delivery services in key cities like London.)

At the time, Deliveroo was valued at around $2 billion; its valuation now is likely to be closer to $3 billion.

It’s worth pointing out too that another major acquisition that Amazon has made in Europe, of LoveFilm (to build eventually its Netflix competitor Amazon Prime Video), also started with an investment.

Amazon has meanwhile been gradually expanding Amazon Fresh, Amazon Pantry and other grocery delivery in the UK, but has yet to really utilise its relatively recent ownership of Whole Foods to expand that business beyond a few retail locations in London.

In the UK, there have also been rumors that Amazon has considered snapping up real estate from failing brick-and-mortar superstores, although so far nothing has materialised.

In that context, a stake in Deliveroo could well be one development in what is a very long-term play for Amazon, a company known for pulling off tenacious, long-term plays. Whether the CMA chooses to investigate both the deal as well as that wider context will be an interesting one to chew on.

#amazon

#Business Tech News

Leave a comment

Make sure you enter all the required information, indicated by an asterisk (*). HTML code is not allowed.

back to top

Latest Articles

Ultimate Ears Wonderboom 2 UK Review: A small leap forward

Ultimate Ears Wonderboom 2 UK Review: A small leap forward

24 June, 2019

It’s been two years since the release of Ultimate Ears’ fully waterproof speaker, the Wonderboom. It became a fan-fa...

Security Cameras in London to Reach 627,000 this Year

Security Cameras in London to Reach 627,000 this Year

23 June, 2019

The number of video surveillance cameras in London will hit an all-time high this year, according to CCTV.co.uk research...

Facebook and eBay told to tackle trade in fake UK reviews

Facebook and eBay told to tackle trade in fake UK reviews

22 June, 2019

Facebook   and eBay  have been warned by the U.K.’s Competition and Markets Authority (CMA) to do mor...

Identity Theft and Cyber-Fraud in the UK Rising Higher

Identity Theft and Cyber-Fraud in the UK Rising Higher

22 June, 2019

In 2017 the risk of fraud continued to evolve and intensify in the UK; identity fraud hit a new all-time high and cybe...

HP EliteDisplay E243d 23.8in Docking Monitor UK Review: Perfect for the office

HP EliteDisplay E243d 23.8in Docking Monitor UK Review: Perfect for the office

22 June, 2019

When HP describes a monitor as a docking monitor, they are serious. It has packed this display with everything you wou...

Deploying automation: Is very successful, but not without resistance

Deploying automation: Is very successful, but not without resistance

22 June, 2019

Survey points to differences in the way organisations are deploying automation, the success rate is high, but there are ...

Home Tech Reviews UK

Mobile Tech Reviews UK

Links

About Us

Follow Us

×

Sign up to keep in touch!

Be the first to hear about the Top Tech News - Tech Reviews and Latest Offers from UK Tech Today and our partners.

Check out our Privacy Policy & Terms of use
You can unsubscribe from email list at any time