The UK Competition Authority announces its provisional clearance of a proposed acquisition of a stake in a food delivery company in its first application of “failing firm” defence during the COVID-19 pandemic (Amazon / Deliveroo)

On 17 April 2020 the CMA announced its provisional clearance of Amazon’s proposed acquisition of a stake in Deliveroo. The transaction was referred for an in-depth Phase 2 investigation in December 2019, in light of concerns about the impact on competition for the supply of online restaurant delivery platforms and the supply of online convenience groceries. However, the ongoing COVID-19 pandemic has resulted in significant changes to the competitive environment since the start of the CMA’s investigation: against a backdrop of restaurant closures, consumer fears over contamination, and a significant reduction in the number of available drivers, Deliveroo has provided evidence to the CMA that without the Amazon investment it will fail financially and be forced to exit the market. The CMA’s