Antitrust proceedings against Delivery Hero and Glovo: EU Commission imposes heavy fines
The European Commission has today adopted a decision confirming that Delivery Hero and Glovo have infringed EU competition rules. The Commission found that the two companies were involved in a cartel in the online delivery services sector and imposed a total fine of 329 million euros on them.
Both companies, which are well-known brands in the industry, admitted their involvement in the cartel and agreed to a settlement. This is the first time that the Commission has fined companies for a so-called "no-poach agreement". Under such agreements, companies refrain from recruiting or actively approaching each other's employees.
The decision is significant as it shows how companies can abuse a small stake in a competitor to act anti-competitively. These arrangements are not only important for pricing, but also for the labor market by ensuring that employers compete for talent rather than colluding to limit the number and quality of employment opportunities.
The investigation found that Delivery Hero had acquired a minority stake in Glovo in July 2018, which eventually grew to a full acquisition by July 2022. This relationship gave the companies a channel to align their strategies. This led to a number of illegal practices falling under Article 101 of the Treaty.
Illegal practices in detail
The investigation uncovered three related illegal practices:
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No-poach agreements: Companies agreed not to actively recruit each other's employees, which affected competitive labor market conditions and could depress wages.
Sharing sensitive business information: The close relationship between the two companies' management teams allowed for the sharing of strategic information beyond what was necessary to protect financial interests.
Market sharing: Delivery Hero used its role as a shareholder to get Glovo to share markets within the European Economic Area (EEA). This was achieved through direct and indirect influence, whereby the companies strategically decided which markets they would enter and where they would have a presence.
The Commission considers these three practices to constitute a single and continuous anti-competitive act that lasted from July 2018 to July 2022 and affected the entire EEA.
Penalties and outlook
The fines amount to approximately €223 million for Delivery Hero and €106 million for Glovo. As both companies opened the investigations with an admission of guilt, the fine was reduced by 10%.
This decision underlines the Commission's determination to take action against all forms of cartels. In the future, increased monitoring of potentially anti-competitive practices in consumer-oriented industries will be pursued. "Our aim is to ensure that effective competition is maintained to the benefit of European consumers and fair businesses," emphasized the Commission.
European citizens can therefore look forward to these measures strengthening competition and leading to better offers in both the online grocery delivery service and the employment sector.
Note: This article has been translated using a computer system without human intervention. LUMITOS offers these automatic translations to present a wider range of current news. Since this article has been translated with automatic translation, it is possible that it contains errors in vocabulary, syntax or grammar. The original article in German can be found here.
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