Brussels (Brussels Morning Newspaper) Delivery Hero and its subsidiary Glovo were fined €329 million by the European Commission on Monday for allegedly running a “cartel” in the European food delivery market.
As reported, Two of the biggest meal delivery services in Europe are Hero and Glovo. They deliver groceries, other retail (non-food) items, and meals (cooked by a restaurant or professional kitchen) to clients who place orders via an app or website.
What anti-competitive tactics did the companies allegedly use?
According to the EU Commission, from 2018 until 2022, when Berlin-based Delivery Hero fully took over its Spanish rival, both companies—which deliver ready-to-eat meals along with other food and retail goods—engaged in a number of anti-competitive actions throughout Europe.
According to the Commission, these tactics included exchanging confidential business information, dividing up market share, and deciding not to employ one other’s staff.
EU competition director Teresa Ribera said that both businesses engaged “in a cartel in the online food delivery sector.” She went on to say that this is the first time the Commission has penalised businesses for accepting a so-called “no-poach” agreement, in which both parties promise not to hire one other’s workers.
How did Delivery Hero’s takeover of Glovo influence behaviour?
Glovo was forced to pay €106 million, and Delivery Hero was fined €223 million. According to Brussels, the anti-competitive behaviour started in July 2018 when Delivery Hero purchased a minority position in Glovo. With the exception of the “no-poach” agreement, most kinds of collaboration dissolved in December 2018, as these activities progressively spread.
Beginning in January 2020, the agreement to divide market share and exchange private data persisted until July 2022, when Delivery Hero fully took over Glovo. According to the Commission, the case was brought about by whistleblowers and Brussels’ internal oversight procedures rather than by any specific business.
Both businesses
“admitted their involvement in the cartel and agreed to settle the case,”
according to the Commission.
Why is this fine significant for the food delivery sector?
In addition to the this high-profile fine on Delivery Hero and Glovo, the European Commission has imposed several fines on food delivery and related companies for competition (antitrust) violations. For example, in November 2023, the Commission conducted unannounced inspections (dawn raids) at the premises of a number of online food delivery companies in two EU member states, investigating breaches of EU competition rules suspected to be infringements of competition rules in the EU such as cartels, market allocation agreements, and no-poach agreements.
