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E-commerce giant Amazon AMZN, +0.86% on Tuesday won approval from the U.K.’s competition watchdog to take a stake in U.K.-based food delivery platform Deliveroo.
The decision by the Competition and Markets Authority (CMA) ends its 15-month investigation into Amazon’s investment in Deliveroo, which came as part of a $575 million fundraising that saw others invest in 2019.
Read: Amazon ends own restaurant-delivery service as Grubhub and Uber Eats competition intensifies
The investigation focused on whether Amazon’s 16% Deliveroo stake would harm competition, and whether this would reduce the chances of it entering the market as a competitor itself.
“[Amazon’s] status as a strategic investor is likely to increase the weight Amazon’s views will carry with Deliveroo’s management and other investors and, in turn, increase its ability to influence Deliveroo’s commercial strategy,” it said in a submission to the CMA.
It reviewed submissions from rivals including Just Eat Takeaway, TKWY, +1.06% which argued that the investment would make Amazon less likely to enter the U.K. fast food delivery market and that it would be able to influence Deliveroo’s strategy in a way that harms competition.
In a December note, investment bank Jefferies said the investigation “smacks of ‘not on my watch’ interventionism,” attributing the case to negative political sentiment toward large U.S. internet companies in 2019.
But Andrea Gomes da Silva, the CMA’s executive director, said at the time: “If the deal were to proceed in its current form, there’s a real risk that it could leave customers, restaurants and grocers facing higher prices and lower quality services as these markets develop.”
“This is because the significant competition which could otherwise exist between Amazon and Deliveroo would be reduced,” he added.
During the case the CMA also considered whether without the investment Deliveroo would collapse under the financial strain caused by Covid-19, provisionally clearing the investment in April.
It continued investigating and again provisionally cleared the investment in June after noting a “considerable improvement” in Deliveroo’s financial position.
It said the investment should go ahead as it wouldn’t damage competition in either restaurant delivery or convenience grocery delivery, though it continued to ask for views and assess evidence on the provisional findings.
But Tuesday’s decision now formally clears the way for Amazon and the investment will go ahead.
Read: Amazon targets Uber Eats with huge Deliveroo investment
Stuart McIntosh, who chaired the inquiry, said a further investigation could be triggered if Amazon sought to increase its control of Deliveroo.