The UK watchdog, the Competition and Markets Authority (CMA), raised concerns this week that Amazon and Deliveroo had "ceased to be distinct" or that they could merge in the future. This would reduce customer choice in the market, which gives the CMA grounds to intervene in the business relationship. It issued an initial enforcement order limiting what changes can be made to the business and its relationship with Amazon. Amazon was forced to close its own restaurant delivery service in the UK last year when it couldn't keep up with local counterpart Deliveroo. But never one to be outdone, Amazon decided this year to lead a $575 million funding round in Deliveroo and became the company's largest backer. For now, Deliveroo can continue delivering food in the UK, but it must operate as distinct company with its own sales and branding and not be subsumed under the Amazon brand. The ruling also forbids any "substantive changes" to the organizational structure of the business while the CMA decides if it should launch a full investigation. Correction, July 5, 2019, 11:50AM ET: This article originally stated that Amazon invested $575 million in Deliveroo. The company was part of leading a $575 million funding round, but it wasn't the only company who put money into the investment. We apologize for the error.
The UK's Competition and Markets Authority has placed limitations on Deliveroo's links with Amazon after raising concerns about a reduction of customer choice in the food-delivery market. Deliveroo can operate in the UK as a separate company and must not be absorbed by the e-commerce brand, it said. The watchdog's decision followed the online retail giant's participation in a $575 millionm funding round earlier this year, which made it Deliveroo's biggest backer. Amazon closed its UK-based food delivery business last year due to competition from Deliveroo.