Latest Amazon Update – Amazon’s Investment In Food Delivery Giant Deliveroo Is Now UK Approved
Today the Competition and Markets Authority (CMA) has revealed that the company could proceed as the head investor in a funding round worth $575 million. The deal will give Amazon a 16% percent share in Deliveroo.
If Amazon were to acquire a bigger level of investment over Deliveroo, this could start a further investigation by CMA, the regulator explained in a press release.
The CMA’s decision follows a provisional approval announced last April. The watchdog was majorly concerned that the deal would discourage Amazon from coming back to the UK market and reduce customer choice.
It also feard that the cash investment would make it difficult for newcomers to compete with Deliveroo or Amazon’s grocery services.
The COVID-19 pandemic really had its effect on Deliveroo, though, and the food delivery company said it would be forced to leave the market without Amazon’s investment. Together with this new information, the CMA believed it was in everyone’s favor to let the deal go through.
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“The CMA currently considers that the imminent exit of Deliveroo would be worse for competition than allowing the Amazon investment to proceed and has therefore provisionally found that the deal should be cleared,” the regulator said in a press conference at the moment.
A lot can change in a couple of months, though. The food delivery market has restructured since April and, according to the CMA, rapidly improved Deliveroo’ s finances.
As such, the regulator couldn’t give approval to Amazon’s investment on the basis that Deliveroo couldn’t stand without it
The CMA shifted diverted its focus instead onto the money involved and whether Amazon’s theoretical stake would affect its incentives to compete independently with Deliveroo in both restaurant delivery and online convenience grocery delivery in years to come.
Amazon to stop accepting Visa credit cards in UK
Amazon will stop accepting Visa credit cards issued in the UK from 19 January, the online retail giant has said.
It said the move was due to high credit card transaction fees but said Visa debit cards would still be accepted.
Visa said it was “very disappointed that Amazon is threatening to restrict consumer choice in the future”.
Amazon said: “The cost of accepting card payments continues to be an obstacle for businesses striving to provide the best prices for customers.”
The online retailer said costs should be going down over time due to advances in technology, “but instead they continue to stay high or even rise”.
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An Amazon spokesperson said the dispute was to do with “pretty egregious” price rises from Visa over a number of years with no additional value to its service.
Amazon is offering £20 for Prime customers to switch from using Visa to an alternative payment method, and £10 for other customers, if they have a Visa cards as their default or only payment method on their account.
Visa said in a statement it was “very disappointed that Amazon is threatening to restrict consumer choice in the future. When consumer choice is limited, nobody wins.”
It said it had “a long-standing relationship with Amazon” and that it was trying to resolve the situation so customers would be able to use Visa credit cards with Amazon UK.
Amazon declined to say how much Visa charges the retailer to process transactions made on credit cards.
Visa also declined to comment though it claimed that on average it takes less than 0.1% of the value of a purchase.
