Amazon's purchase of a stake in Deliveroo has been provisionally cleared by Britain's competition regulator in light of a potentially fatal deterioration in the online food delivery group's finances as a result of the coronavirus pandemic.
Amazon led a $575m fundraising in Deliveroo in May, making what the two parties called "a minority investment".
The investment pitched it against Uber Eats and Takeaway.com in the global race to dominate the market for takeaway meal deliveries.
The UK Competition and Markets Authority (CMA) said in December the deal raised "serious competition concerns" for consumers and shortly after launched a detailed probe.
However, the CMA said today it had become clear that the health emergency was having a significant negative impact on Deliveroo's business, given the closure in the lockdown of a large number of the key restaurants available through the firm.
The regulator said it was informed by Deliveroo recently that the impact of the pandemic on its business meant that it would fail financially and exit the market without the Amazon investment.
"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," it said.
