Just Eat's £200 million acquisition of Hungryhouse faces an in-depth probe by U.K. regulators over concerns that it will lead to poorer service for British restaurants using either delivery service.
The Competition and Markets Authority stated that the planned merger will be referred to as a Phase 2 investigation. Its concerns are based on the fact that Just Eat and Hungryhouse are close competitors because of similar services and broad geographical coverage and a merger could lead to “worse terms” for its restaurant clients, according to the regulator.
The CMA's statement also cited that Just Eat agreed in December to buy Hungryhouse from Delivery Hero Holding GmbH to fend off growing competition from competitors like Deliveroo, Ubereats and Amazon Restaurants.
The CMA said that Just Eat has until May 17 to offer proposals to resolve the competition concerns and avoid the investigation. Just Eat proclaimed that it was cooperating with the probe.
The CMA dismissed the strength of competition from a number of new entrants to the food delivery market.
Amazon.com Inc. extended its U.S. restaurant-delivery service to London in September. Uber Technologies Inc. and closely-held Deliveroo also operate in the UK capital. The regulator said the three companies represent "less direct competition" as they target dine-in restaurants rather than fast-food outlets.
News by Bloomberg, edited by Hospitality Ireland.