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Delivery Hero Warns of Potential €400M Antitrust Fine

ByHuey Yee Ong

Jul 9, 2024

Delivery Hero Warns of Potential €400M Antitrust Fine

Delivery Hero, the Berlin-based food delivery giant, has alerted investors about a potential antitrust fine of up to €400 million. This announcement follows previous unannounced inspections by European Union authorities at the offices of Delivery Hero and its Spanish subsidiary, Glovo, in July 2022 and November 2023.

The European Commission had concerns about possible breaches of competition laws related to forming cartels and other restrictive business practices, although the companies were not named at the time. Both Delivery Hero and Glovo confirmed that inspections had occurred.

Delivery Hero’s Response to Potential Sanctions

On Sunday evening, Delivery Hero issued a note to investors indicating the company could face sanctions for “alleged anti-competitive agreement to share national markets, exchanges of commercially sensitive information and no-poach agreements.”

In its annual report last year, Delivery Hero mentioned it had reserved €186 million following the EU inspections. The company explained the intent to increase this provision, based on recent informal engagements with the European Commission and detailed analysis. Delivery Hero emphasized its commitment to fully cooperate with the European Commission, as it did during the inspections.

Delivery Hero acquired a majority stake in Glovo at the end of 2021, about half a year after Glovo consolidated three of its sub-brands. The food delivery industry, known for its thin margins, has seen rapid consolidation as companies strive to secure leading positions in markets to achieve economic viability.

The post-pandemic period has witnessed numerous market exits and business closures as the surge in food delivery demand during lockdowns has subsided, highlighting the challenges inherent in the food delivery business model.

Featured Image courtesy of Peter Meißner/ullstein bild via Getty Images

Huey Yee Ong

Hello, from one tech geek to another. Not your beloved TechCrunch writer, but a writer with an avid interest in the fast-paced tech scenes and all the latest tech mojo. I bring with me a unique take towards tech with a honed applied psychology perspective to make tech news digestible. In other words, I deliver tech news that is easy to read.

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