EU fines Delivery Hero, Glovo €329m for violating competition rules

The European Union has fined German food delivery company Delivery Hero and its Spanish subsidiary Glovo a total of €329 million ($376 million) for breaching antitrust regulations.

EU regulators found that between 2018 and 2022, Delivery Hero exploited its stake in Glovo to restrict competition by exchanging sensitive commercial information, agreeing not to poach each other’s employees, and dividing national food delivery markets between themselves.

Delivery Hero, headquartered in Germany, acquired a 94% stake in Glovo in July 2022, but the EU investigation focused on the period prior to full control.
Both firms are among Europe’s largest food delivery services, offering meals, groceries, and other products via their apps and websites.

The European Commission, the EU’s competition watchdog, stated that both companies admitted their involvement in the cartel and agreed to pay fines to settle the case.

Cartels like this reduce choice for consumers and business partners, limit opportunities for employees, and diminish incentives to compete and innovate,” the Commission said.

Delivery Hero faces a fine of €223 million, while Glovo must pay approximately €106 million.

“This case is significant because these practices were facilitated through an anticompetitive use of Delivery Hero’s minority stake in Glovo,” said EU competition chief Teresa Ribera.

The companies agreed not to actively recruit each other’s employees, initially covering managerial staff before extending to all employees except delivery drivers, who were classified as self-employed.

This marks the first time the Commission has sanctioned a no-poach agreement, where companies cease competing for talent, thereby reducing workers’ opportunities.

The firms also exchanged confidential information on pricing, commercial strategies, capacity, and costs, and coordinated market entries to avoid overlapping operations.

By July 2020, they had ceased competing in the same markets, reducing consumer choice and contributing to higher prices.

Delivery Hero confirmed it had reached a settlement with the Commission and had already set aside provisions for the fine.

Delivery Hero operates in over 70 countries worldwide, including 16 in the European Economic Area, while Glovo is active in more than 20 countries, including eight in the EEA.

AFP