The “long awaited” £6.2bn merger between food delivery giants Just Eat and Takeaway.com has hit a hitch “days before the finish line” say Poppy Wood and Edward Thicknesse in City AM. The Competition and Markets Authority (CMA) is to open an investigation into the tie-up to gauge whether the deal has reduced competition by stopping Takeaway.com from re-entering the UK market (which it left in 2016) as an independent firm.
The CMA’s move follows a protracted review of Amazon’s plan to take a minority stake in Deliveroo, Just Eat’s biggest British rival, notes Tim Bradshaw in the Financial Times. Both cases centre on “whether the deals would prevent a large new entrant from joining the UK’s vibrant food delivery market” and come as the global food delivery market is “consolidating rapidly”. Operators hope that “global scale” and less competition” will boost profitability.
Like Amazon’s investment in Deliveroo, Takeaway’s deal with Just Eat doesn’t look like an “obvious candidate” for regulatory scrutiny, says Karen Kwok on Breakingviews. But antitrust regulators are right to take a more restrictive view when it comes to technology-driven markets, which tend to have “winner-takes-all” characteristics. In any case, this new, more aggressive, approach is better than the “supine posture” the CMA adopted when it concluded in 2012 that Facebook’s Instagram purchase “probably wouldn’t substantially reduce social-media competition”. Antitrust wonks are finally “erring on the side of caution”.
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