The European Commission announced on Tuesday a formal investigation into the activities of Berlin-based food delivery giant Delivery Hero and its Spanish subsidiary, Glovo, citing concerns about potential cartel behavior. The Commission will conduct a thorough probe into agreements between the two online delivery companies to determine if any anticompetitive practices have taken place.
According to a press release by the Commission, they are worried that Delivery Hero and Glovo may have engaged in market allocation and sharing of sensitive information before Delivery Hero’s acquisition of Glovo. This includes sharing information on commercial strategies, prices, capacity, costs, and product characteristics, as well as agreeing not to poach each other’s employees. The Commission also raised concerns about the potential influence of Delivery Hero’s minority stake in Glovo.
The investigation follows surprise inspections conducted at the local offices of both companies in July 2022 and November 2023. Delivery Hero acquired a minority share in Glovo in July 2018, eventually gaining sole control in July 2022, leading to this investigation, which is the first of its kind involving anti-competitive agreements in the context of a minority shareholding.
Both Delivery Hero and Glovo have been contacted for their response to the investigation. A spokesperson for Glovo confirmed the investigation, emphasizing their commitment to cooperating with the European Commission and meeting all regulatory requirements. Delivery Hero has also released a similar response on their website, which can be found here.
Earlier this month, Delivery Hero warned investors of a potential antitrust fine of up to €400 million related to the EU antitrust investigation. The online food delivery industry is known for its fierce competition and slim margins, with companies constantly vying for top positions in the market to build sustainable businesses.
Following a surge in food delivery app usage during the pandemic, the sector is now experiencing a period of consolidation, market exits, layoffs, and closures of startups. It remains a challenging landscape for players in the industry.
This report has been updated with a link to Delivery Hero’s statement.
