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Delivery Hero could face €400m EU fine for antitrust violations

Posted on by darion

Delivery Hero did not provide a timeline for when the fine might be imposed. Source: nitpicker/Shutterstock.

German food delivery company Delivery Hero has issued a warning that it could be fined more than €400 million ($433 million) by the European Commission for violating antitrust rules.

According to a statement from the company, it is under scrutiny for an “alleged anti-competitive agreement involving the allocation of domestic markets, exchange of confidential commercial information and non-acquisition agreements.”

In the face of a potential fine, Delivery Hero and its board have decided to “significantly increase” the provision already made, which now stands at €186 million.

The decision is the result of informal talks with the European Commission and subsequent detailed analysis.

The company expressed its intention to fully cooperate with the European Commission, as it did during previous unannounced inspections in July 2022 and November 2023.

Delivery Hero did not provide a time frame for when the fine might be imposed.

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Bloomberg says the antitrust scrutiny comes at a difficult time for the food delivery industry, which already faces fierce competition and slim profit margins.

The European Commission declined to comment on the matter on 8 July 2024.

While the EU regulator has yet to publish its findings on Delivery Hero, the company and its Spanish subsidiary Glovo have been targeted by raids twice since 2022, with officials looking for evidence of illegal arrangements.

The Commission raised concerns about potential breaches of rules “prohibiting cartels and restricting business practices”.

Both Delivery Hero, which acquired a majority stake in Glovo in 2022, and Glovo itself confirmed the raids at the time.

Delivery Hero shares fell 18% on July 8 following the news, marking their biggest decline since April 26.