Delivery Doofus Duo Gets Slapped with Millions in Euros for Shifty Schemes
Delivery Hero Faces Seven- Figure Settlement for Cartel Penalty
Grab a Beer, It's Delivery Hero's DayDelivery Hero, the food delivery service, and its Spanish counterpart Glovo, have been hit with a hefty €329 million fine by the EU for their sly dealings. The EU Commission in Brussels accused the duo of engaging in price-fixing, market-sharing, and sneaky agreements about strategies—all in the name of anticompetitive practices. Glovo, now a subsidiary of the Berlin-based DAX company, received a €106 million fine.
Tech Tit-for-Tat?Not only did these tech titans collude on pricing, but they also formed a pact to prevent poaching each other's employees and divided territories between them, stifling competition. The EU Commission stated the collusion occurred mainly via emails and WhatsApp, shedding a disheartening light on the lax security of contemporary communication channels.
Labour Lawlessness?EU Commission Vice-President Teresa Ribera proudly announced this as the Commission's first fine for anti-poaching agreements. The intent behind such sanctions is to create a fairer labor market, enabling employers to compete for talent instead of colluding to restrict opportunities.
The Great Germany DisconnectThe EU Commission kept mum about the impact on consumers or competitors in Germany, though it’s worth noting that Delivery Hero was operating in the German market while Glovo was not.
Detective WorkInvestigations into this shifty scheme began back in November 2023 when the Commission conducted unannounced inspections at Delivery Hero in Berlin and Glovo in Barcelona. Delivery Hero maintained it had been a model citizen throughout the process, fully cooperating with the Commission.
Shared Stakes, Shared StrugglesDelivery Hero acquired a minority stake in Glovo in July 2018 and took full control in July 2022. However, the EU Commission emphasized that the collusion occurred before the takeover, with both companies owned up to their roles in the covert cartel.
What's Next?Last year, Delivery Hero anticipated a fine of over €400 million for this debacle. Fortunately for them, the final bill was roughly €183 million less. The EU Commission's latest move signals a tougher stance on antitrust violations, and chances are, other tech giants will be watching closely.
Breaking BitesWhat’s next in the exciting world of food delivery? Investment heavyweight Prosus is making waves with plans to acquire Just Eat Takeaway. Buckle up!
Sources: ntv.de, jwu/dpa
- Delivery Hero
- EU Commission
- Antitrust
- Fine
- MDax Company
Enrichment Data:The fines were imposed due to Delivery Hero and Glovo’s involvement in a cartel that lasted from July 2018 to July 2022. Delivery Hero was fined €223.29 million, and Glovo was fined €105.73 million. The reduced fines were the result of the companies’ admission to their participation in the cartel (10% reduction)[1][3].
The anti-competitive practices included mutual elimination of competitive constraints, shared access to sensitive business information, and no-poach agreements aimed at limiting job opportunities and competition in the labor market[1][2][4]. This case establishes a precedent as the first EU antitrust enforcement involving a minority shareholding and labor markets—a cautionary tale for tech companies everywhere.
[1] Delivery Hero and Glovo Fine
[2] Anticompetitive Agreements Detailed
[3] Reduction in Fines due to Cooperation
[4] Labour Market Impact
- The EU Commission's fine on Delivery Hero and Glovo, amounting to €329 million for anticompetitive practices, could potentially influence the community policy within the food delivery industry.
- The revelation of anticompetitive practices such as no-poach agreements between Delivery Hero and Glovo, as highlighted in the EU Commission's investigation, raises concerns in finance and business circles, prompting calls for stricter employment policies to ensure fair competition.
- The EU Commission's recent fine on Delivery Hero and Glovo, totaling €329 million, serves as a reminder of the gravity of antitrust violations, having implications not only for tech giants but also for political leaders engaged in industry regulation and general-news outlets reporting on crime-and-justice issues.
