Competition watchdog freezes Amazon's Deliveroo investment

The Competition and Markets Authority is taking a closer look at the e-commerce giant's reported $575 million in funding for the UK online food delivery company.

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Deliveroo's investment from Amazon has been paused.

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The UK competition watchdog regulator hit pause on Amazon's investment in meal-delivery service Deliveroo on Friday. The funding was paused with an initial enforcement order, the Guardian reports. 

The Competition and Markets Authority raised concerns that the companies "have ceased to be distinct." In other words, it's worried that the two could merge, which would reduce consumer choice and break competition rules.

In May, Amazon was first reported to be leading a $575 million round of funding sought by Deliveroo, which would give the online food delivery company a better shot at competing with Uber Eats and DoorDash. 

"We believe this minority investment will enable Deliveroo to expand its services, benefiting consumers through increased choice and creating new jobs as more restaurants gain access to the service," an Amazon spokesperson said in an emailed statement.

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In a separate statement, Deliveroo noted that it and Amazon were working "closely with regulators to obtain regulatory approvals."

"There are a number of major companies within the restaurant food delivery sector and this investment will enable Deliveroo to expand, innovate and, we believe, will enhance competition," a spokesperson wrote.

Deliveroo operates all over the UK, as well as in Australia, Germany, the US, France, Singapore, Hong Kong, Belgium, Ireland, Italy, the Netherlands, Spain, Taiwan, Kuwait and the United Arab Emirates.

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Amazon shut down its own UK-based food delivery service -- Amazon Restaurants UK -- last December, in the face of competition from Deliveroo and Uber Eats.

It originally launched the service for its Seattle-based Prime customer in 2015, then expanded to other US cities.

First published at 4:44 a.m. PT.
Updated at 5:09 a.m. PT: Adds more detail.