(Bloomberg) -- Delivery Hero SE and its Spanish subsidiary Glovo run the risk of hefty European Union fines, after antitrust regulators opened a full scale investigation to determine whether the companies may have illegally colluded with each other.
The European Commission said Tuesday that before Delivery Hero’s acquisition of Glovo, the firms may have carved up markets in Europe, shared sensitive commercial information and also agreed to avoid poaching each other’s staff. Shares in the company fell 2.7% by 12:19 p.m. in Frankfurt.
Delivery Hero told investors in earlier this month that it’s expecting an EU antitrust fine that could exceed €400 million ($435 million). The company said its decision to “significantly increase” a provision already built in the amount of €186 million.
A Delivery Hero spokesperson said it is fully cooperating with EU regulators and is committed to meeting all regulatory requirements.
The EU investigation comes after Delivery Hero sites in Berlin and Barcelona were hit by a series of EU raids in 2022 and 2023 and follows a testing time for the food delivery industry. The food delivery industry is grappling with high competition and thin profit margins, while takeout orders have declined as more people turn to restaurants following pandemic-era lockdowns.
The latest move from Brussels watchdogs follows similar efforts to root out price-fixing abuses across a number of sectors.
In January, the bloc’s regulators embarked on a broad investigation of the tire market, fearing that giants such as Michelin, Bridgestone Corp, Continental AG, and Goodyear Tire & Rubber Co. may have colluded to fix prices. In June, pharmaceutical firm Alchem International got a formal warning from Brussels, with watchdogs fearing it may have coordinated with market participants to fix sales prices.
--With assistance from Karin Matussek.
(Updates with Delivery Hero statement in fourth paragraph.)
©2024 Bloomberg L.P.
