EU antitrust fines food delivery giants in landmark cartel case

The Commission’s investigation into anti-competitive agreements betwixt Germany’s Delivery Hero and Spain’s Glovo, 2 of Europe’s largest nutrient transportation companies, has seen nan companies slapped pinch a full good of €329 million.

The companies were recovered to person violated EU title rules by participating successful a cartel that manipulated nan online ordering and transportation of food, groceries and different regular user goods.

This lawsuit sets an important precedent, arsenic it's nan first clip nan EU has sanctioned nan anti-competitive usage of a number shareholding, highlighting really mini stakes successful a competing business tin beryllium misused to restrict competition.

“Of course, owning a liking successful a competitor is not illegal. But it whitethorn beryllium problematic erstwhile that liking is utilized to summation wrong accusation and power decisions successful ways that tin harm competition,” said nan Commission’s executive vice president successful complaint of competition, Teresa Ribera.

It is besides nan first lawsuit of EU antitrust enforcement concerning labour markets, arsenic nan Commission recovered that nan cartel betwixt Delivery Hero and Glovo included agreements not to prosecute aliases poach each other’s labor - practices that, according to nan EU executive, trim occupation opportunities for workers.

“This investigation shows that title rules aren't conscionable astir keeping prices down,” said Ribera, adding that EU antitrust rules besides thief guarantee “a adjacent labour marketplace wherever employers compete for talent and do not collude to limit nan number and value and opportunities for workers.”

Minor stakes, awesome fines

Beginning successful July 2018, Delivery Hero acquired a number stock successful Glovo, which it gradually accrued done further investments. Four years later, successful 2022, it gained sole power complete Glovo.

In June 2022 and again successful November 2023, nan Commission carried retired unannounced inspections astatine nan companies’ premises arsenic portion of a self-initiated enquiry into imaginable collusion successful nan nutrient transportation sector.

The Commission concluded that from July 2018 to July 2022, Delivery Hero and Glovo progressively dismantled competitory constraints betwixt them and replaced normal marketplace rivalry pinch layered anti-competitive coordination.

The infringement ended successful 2022 erstwhile Delivery Hero formally acquired a mostly liking successful Glovo, making it a subsidiary.

Both companies acknowledged their engagement successful nan cartel and agreed to settee nan case, a process introduced successful 2008 that allows firms to judge liability and nan projected fines.

In return for cooperating and waiving definite procedural rights, some companies received a modular 10% simplification successful their fines: astir €223 cardinal for Delivery Hero and €106 cardinal for Glovo.

Sharing nan pie

Central to nan Commission’s findings was Delivery Hero’s number shareholding successful Glovo, which enabled and facilitated nan unlawful coordination.

According to nan investigation, this number shareholding created a transmission done which nan 2 companies coordinated their operations and strategies.

“They exchanged delicate accusation beyond what was needed for a firm investor to protect a financial finance decision,” said nan Commission’s Ribera.

The accusation exchanged included commercialized strategies, pricing, capacity, costs, merchandise characteristics, and nan organisation of rider distribution networks.

“They discussed virtually everything. And of course, this could only lead them to perchance align their contented connected nan market,” said a elder EU official.

The companies besides divided geographic markets crossed Europe: They avoided entering each other’s nationalist markets and coordinated marketplace entries wherever neither was present, efficaciously eliminating nonstop title betwixt them.

Another awesome constituent of nan infringement was nan statement not to prosecute aliases actively attack each other’s labor - nan alleged ‘no-poach’ agreements, which are considered a shape of purchasing cartel.

“In different words, companies extremity straight competing for workers. This is not bully for workers, arsenic it is nan type of statement that suppresses wages and reduces labour mobility,” Ribera explained.

Possible developments

Ribera noted that nan Commission will salary much attraction to nan competitory risks posed by number shareholder agreements.

“I deliberation it is not needfully bad. On nan contrary, it whitethorn beryllium very good,” Ribera said astir nan practice, clarifying that it is reasonable for a shareholder to entree applicable accusation to guarantee sound finance decisions.

However, she drew a clear statement astatine nan misuse of delicate information, peculiarly erstwhile specified entree goes beyond what is basal for a shareholder and could restrict title successful a fixed sector.

The Commission, she said, will beryllium vigilant successful preventing specified behaviour from occurring successful different industries.