Berlin-based food delivery giant Delivery Hero has warned investors that it could “ultimately” face an antitrust fine of up to €400 million.
The development, previously reported by Reutersfollows unannounced attacks by European Union authorities on the offices of Delivery Hero and its Spanish subsidiary Glovo in July 2022 It is November 2023.
The EU did not reveal the names of the companies at the time, although both confirmed that inspections had taken place. The European Commission said it was concerned about potential violations of competition laws against the formation of cartels and other restrictive trade practices.
On a note to investors issued on Sunday evening local time, Delivery Hero said it could face sanction for “alleged anti-competitive agreement to share national markets, exchange of commercially sensitive information and no-poaching agreements.”
In its annual report last year, Delivery Hero said it set aside €186 million following unannounced EU inspections.
“The intention to increase the provision is based on recent informal engagement with the European Commission and subsequent detailed analysis,” he wrote, explaining the increase in the reserved amount. “Delivery Hero intends to fully cooperate with the European Commission, as it did during unannounced inspections in July 2022 and November 2023.”
The German giant acquired a majority stake in Glovo through the end of 2021 – about half a year after the Spanish rival had shelled out accumulate three of its sub-brands.
Accelerated consolidation has been a key feature of the thin-margin food delivery space, as players have jockeyed for the top one (or two) positions in markets in hopes of driving the economy up.
Post-pandemic, we saw dozens of market exits and a number of companies that closed their doors after the lockdown-related boom in food delivery became a distant memory – underlining just how challenging the food delivery business model is.
