Jeff Bezos Is Officially Allowed to Pump £442 Million Into Deliveroo

Amazon’s £442 million investment in restaurant delivery platform Deliveroo will go ahead, giving Jeff Bezos’ biggest toy a 16 percent stake in the London-based pedaller. The Competition and Markets Authority (CMA) approved the investment this morning, according to Propel, after a protracted, unpredictable investigation riven with the impact of COVID-19, inter-takeaway beef, and changes in the restaurant and grocery delivery market in the U.K.

The CMA’s jurisdiction extends only to competition: whether or not Amazon taking a stake in Deliveroo will decrease competition between businesses in restaurant and grocery delivery. The CMA has decided that it will not, based on the relatively minor percentage stake that Amazon will gain in Deliveroo.

The most interesting thing about the decision is that the provisional approval, now ratified, was originally justified by Deliveroo’s claim that only Amazon investment could save it from the impact of COVID-19. It made the claim, predicated on the disruption to restaurants that a restaurant delivery platform needs to exist, despite signing up over 3,000 restaurants in the early stages of lockdown. The potential discrepancy here was the source of some both compelling and tedious beef between Deliveroo and Just Eat Takeaway, in which Just Eat questioned whether “the quality of [Deliveroo’s] business model” was the actual source of its troubles. A veritable zinger.

But then: the CMA decided that that claim was no longer admissible, but it also decided that the investment still wouldn’t decrease competition. It’s important to realise that it is not up to the CMA to make judgements based on the viability or not of a company. Deliveroo’s alleged fear of collapse did not prompt provisional approval because Deliveroo would no longer exist; it prompted provisional approval because that collapse would have reduced restaurant delivery competition. By the same token, Deliveroo’s loss of £232,011,608 in the year to December 2018, and its investment model predicated on the promise of eventual monopoly a la Uber, does not factor into the CMA’s decision. Amazon, for its part, quietly ended its own restaurant delivery service in the U.K. around 18 months ago.

With the marriage of two companies built on logistics whose mechanisms perpetuate the precarity of the gig economy complete, Deliveroo says it is “delighted.” It’s just received £442 million from a bald trillionaire-in-waiting; who wouldn’t be.