Summary:
1. The EU fined Delivery Hero and Glovo €329mn for participating in an online food delivery cartel.
2. The companies coordinated to not poach each other’s employees and share sensitive information, reducing competition and increasing prices for consumers.
3. Delivery Hero will pay €223mn in fines and Glovo will pay €106mn after admitting their involvement and settling the case.
Article:
In a recent antitrust crackdown by the European Union, European takeaway giants Delivery Hero and Glovo have been fined a whopping €329 million for their involvement in an online food delivery cartel. The European Commission revealed that the two companies violated competition rules in the years leading up to Delivery Hero’s acquisition of a controlling stake in Glovo in 2022. During this time, Delivery Hero, despite holding only a minority share in Glovo, used its stake to coordinate with the rival company. They agreed not to poach each other’s employees and exchanged commercially sensitive information. This collusion led to a reduction in choice and an increase in prices for consumers.
The investigation into this cartel began in July 2024, following raids on Delivery Hero and Glovo’s premises in June 2022 and November 2023. This landmark fine marks the first time Brussels has penalized companies for the anti-competitive use of a minority share in a rival business. It also signifies the first instance of punishment for a “no-poach” agreement between companies. The EU’s competition chief, Teresa Ribera, emphasized the importance of this case, highlighting how these practices were facilitated through the anti-competitive use of Delivery Hero’s minority stake in Glovo.
Both Delivery Hero and Glovo accepted their involvement in the cartel and agreed to settle the case, resulting in a 10% reduction in their penalties. Delivery Hero will pay €223 million, while Glovo will pay €106 million. Despite the hefty fines, Delivery Hero remains committed to compliance and ethical operations in the highly competitive industry. This development occurs amidst a period of consolidation for takeaway groups, facing challenges in a tougher macroeconomic environment post-pandemic.
Delivery Hero’s shares were impacted upon the revelation of the potential fine last year, but the final amount was lower than anticipated, leading to a 1% rise in their shares during lunchtime trading. The settlement enables stakeholders to move forward swiftly, emphasizing the importance of competition rules in shaping citizens’ daily lives. This case serves as a reminder of the consequences of anti-competitive behavior and the significance of upholding fair competition in the marketplace.
