Domino’s Pizza demands watchdog blocks Deliveroo from getting Amazon’s dough
The chain said: ‘The fact that this gaping hole in the CMA’s logic has not been investigated is a dereliction of its duties.’
Domino’s Pizza has waded into Amazon’s attempts to buy a slice of Deliveroo, saying the competition watchdog should have blocked the multi-million-pound investment.
In a 33-page submission to the Competition and Markets Authority (CMA), bosses at the delivery chain said they had “serious concerns” at officials allowing the online retailer to enter the takeaway business.
The company added the CMA’s logic on provisionally approving the deal because Deliveroo would collapse without the funding from Amazon was flawed, questioning why the cash could not be raised elsewhere.
Officials had initially raised concerns that the 500 million US dollar (£400 million) investment round could damage competition in the UK as it emerged that Amazon was the majority investor.
Last month, the CMA said it was provisionally allowing Amazon’s investment to go ahead because Deliveroo had warned it would collapse due to Covid-19 shutting restaurants and hitting its business.
Domino’s, which is not on platform apps like Deliveroo or Uber Eats, said it remained unconvinced with the watchdog’s reasons. Rivals including Papa Johns and Pizza Hut are available on Deliveroo.
It said: “Domino’s and its franchisees have serious concerns about the negative impact on competition, and ultimately on consumers, of Amazon’s investment in Deliveroo.
“If the PFs (provisional findings) were to become final the CMA would, in Domino’s view, have failed in its statutory duty to protect competition and consumers in the UK.”
Domino’s argued the CMA was wrong to think Deliveroo would collapse if Amazon’s investment was not approved.
It said officials had already claimed Deliveroo’s business model was not an issue and was a “strong brand with good medium to long-term prospects but for Covid-19 – in other words, it may lack short-term liquidity”.
The chain also questioned why the tech firm’s current investors cannot step up with extra funding to see the business through the crisis, pointing out the CMA was silent on whether cash could be found elsewhere.
Domino’s added: “The fact that this gaping hole in the CMA’s logic has not been investigated is a dereliction of its duties.”
It concluded: “By taking a short-term view unduly influenced by Covid-19 and without proper interrogation of the counterfactual, the CMA provisionally intends to permit Amazon to extend its ecosystem dominance into food delivery, quite apart from foreclosing its own incentives to enter Deliveroo’s market.”
Submissions were also made by smaller businesses and two anonymous accounts.
One anonymous submission questioned why Deliveroo could not raise funds elsewhere.
It read: “(REDACTED) considers that the CMA has not taken into account the potential availability of investors like (REDACTED) as a less anti-competitive alternative to Amazon.”
Another anonymous submission warned the deal could have “dramatic long-term implications for competition in the sector” pointing out that earlier falls in orders quickly reversed in other countries.
Amazon’s own response welcomed the CMA’s provisional findings.