Commission fines Delivery Hero and Glovo €329 million for participation in online food delivery cartel
The Commission has fined Delivery Hero and Glovo, two major food delivery companies, a total of €329 million for participating in a cartel in the online food delivery sector. In particular, the two companies (i) agreed not to poach each other’s employees; (ii) exchanged commercially sensitive information; and (iii) allocated geographic markets. The infringement covered the European Economic Area (‘EEA’) and lasted four years. Cartels like this reduce choice for consumers and business partners, reduce opportunities for employees and reduce incentives to compete and innovate.
Both companies admitted their involvement in the cartel and agreed to settle the case. This is the first decision where the Commission finds a cartel in the labour market and the first time it sanctions the anti-competitive use of a minority share in a competing business.
The infringement
Delivery Hero and Glovo are two of the largest food delivery companies in Europe. They deliver food (prepared by a restaurant or a professional kitchen), grocery and other retail (non-food) products to customers ordering from an app or a website.
In July 2018, Delivery Hero acquired a minority non-controlling stake in Glovo and progressively increased this stake through subsequent investments. In July 2022, Delivery Hero acquired sole control of Glovo.
The Commission has found that, from July 2018 until July 2022, Delivery Hero and Glovo progressively removed competitive constraints between the two companies and replaced competition with multi-layered anticompetitive coordination. In particular, the two companies agreed:
- Not to poach each other’s employees. The shareholders’ agreement signed at the time Delivery Hero acquired a minority non-controlling stake in Glovo included limited reciprocal no-hire clauses for certain employees. Shortly thereafter this arrangement was expanded to a general agreement not to actively approach each other’s employees.
- To exchange commercially sensitive information. Exchanging commercially sensitive information (e.g., on commercial strategies, prices, capacity, costs and product characteristics) enabled the companies to align and influence their respective market conduct.
- To allocate geographic markets. In particular, the two companies agreed to divide among themselves the national markets for online food delivery in the EEA, by removing all existing geographic overlaps between them, by avoiding entry into their respective national markets, and by coordinating which of them should enter in markets where neither was present yet.
All the abovementioned practices were facilitated by Delivery Hero’s minority shareholding in Glovo. Owning a stake in a competitor is not in itself illegal, but in this specific case it enabled anti-competitive contacts between the two rival companies at several levels. It also allowed Delivery Hero to obtain access to commercially sensitive information and to influence decision-making processes in Glovo, and ultimately to align the two companies’ respective business strategies. This shows that horizontal cross-ownership between competitors may raise antitrust risks and should be handled carefully.
The Commission has considered that the three anti-competitive practices constitute a single and continuous infringement, covering the EEA and amounting to an infringement by object under Article 101 of the Treaty on the Functioning of the European Union (‘TFEU’) and Article 53 of the EEA Agreement.
Fines
The fines imposed on both companies were set on the basis of the Commission’s 2006 Guidelines on fines. In setting the fines, the Commission considered various elements, including the multifaceted nature of the cartel, the fact that it covered the entire EEA, its overall duration, and the cartel’s evolution over time, with periods of lesser cartel intensity. In addition, the Commission applied a standard reduction of 10% to the fines, in line with the Commission’s 2008 Settlement Notice, as both companies acknowledged their participation in the cartel and their liability.
The breakdown of the fines imposed on each party is as follows:
- Delivery Hero SE: €223 285 000
- Glovoapp23 SA: €105 732 000
Background
The parties
Delivery Hero, headquartered in Germany, is a company active in the food delivery business. It is currently present in more than 70 countries worldwide, of which 16 are situated in the EEA. It partners with hundreds of thousands of restaurants. Delivery Hero is listed on the Frankfurt Stock Exchange.
Glovo, headquartered in Spain, is also a company active in the food delivery business. It is currently present in more than 20 countries around the globe, of which 8 are situated in the EEA.
In July 2022, Delivery Hero acquired the majority of Glovo’s shares, and Glovo became Delivery Hero’s subsidiary.
The investigation
Article 101 of the TFEU and Article 53 of the EEA Agreement prohibit agreements and other restrictive business practices that may affect trade and prevent or restrict competition within the Single Market.
In June 2022 and November 2023, the Commission carried out unannounced inspections at the premises of Delivery Hero and Glovo. The investigation was a Commission’s own-initiative inquiry into possible collusion in the food delivery sector that was launched following a market monitoring exercise, which itself had been prompted by information received from a national competition authority and via the anonymous whistleblower tool. The investigation was formally opened in July 2024.
This investigation has been a part of the Commission’s efforts to ensure choice and reasonable prices for consumers’ grocery shopping. In a young and dynamic market such as the online food delivery sector where operators often seek to lead or else quit the market, anticompetitive agreements and restrictive business practices, in particular market allocation cartels, may lead to hidden market consolidation, with potential negative effects on competition.
This investigation also contributes to ensuring a fair labour market where employers do not collude to limit the number and quality of opportunities for workers but compete for talent.
More information on this case will be available under case number AT.40795 in the public case register on the Commission’s competition website once confidentiality issues have been resolved. For more information on the Commission’s action against cartels, see its cartels website.
The settlement procedure
The settlement procedure for cartels was introduced in June 2008. In a cartel settlement, parties acknowledge their participation in a cartel and their liability for it. They also accept the maximum amount of the fine which the Commission intends to impose. Cartel settlements are based on Regulation 1/2003, and allow the Commission to apply a simplified and shortened procedure. This benefits consumers and taxpayers as it reduces costs. It also benefits antitrust enforcement as it frees up resources. Finally, the parties themselves benefit in terms of quicker decisions and a 10% reduction in fines. Today’s decision is the 44th settlement since the introduction of this procedure for cartels.
Leniency programme
The Commission’s leniency programme gives companies the opportunity to disclose their participation in a cartel and cooperate with the Commission during an investigation. A successful leniency applicant will either completely avoid a potentially high fine or receive a substantial reduction from it. Further information about the Commission’s leniency programme, including a Frequently Asked Questions document, can be found here.
Whistleblower tool
The Commission has set up a tool to make it easier for individuals or companies to alert it about anticompetitive behaviour while maintaining their anonymity. This tool protects whistleblowers’ anonymity through a specifically designed encrypted messaging system that allows two-way communications. The tool is accessible via this link.
Action for damages
Any person or company affected by the anti-competitive behaviour described in this case may bring the matter before the courts of the Member States and seek damages. The case law of the Court of Justice of the European Union and Council Regulation 1/2003 both confirm that in cases before national courts, a Commission decision constitutes binding proof that the behaviour took place and was illegal. Even though the Commission has fined the companies concerned, damages may be awarded by national courts without being reduced on account of the Commission fine.
The Antitrust Damages Directive makes it easier for victims of anti-competitive practices to obtain damages. More information on antitrust damages actions, including a practical guide on how to quantify antitrust harm, is available here.