A committee’s investigation into anti-competitive agreements between German delivery heroes and Spain’s Glory, two of Europe’s largest food delivery companies, has slapped the company with a total fine of 329 million euros.
It was found that the company violated EU competition rules by participating in a cartel that manipulates online ordering and delivery of food, groceries and other daily consumer goods.
This case sets a significant precedent and highlights that small interests in competing businesses can be misused to limit competition, as it is the first time the EU has authorized the anti-competitive use of minority shareholders.
“Of course, it’s not illegal to own a competitor’s stock, but there may be issues if the stock is used to gain inside information in a way that harms competition and influences decision-making.”
This is also the first case of EU antitrust enforcement on the labour market. This is because the committee found that the cartel between delivery heroes and Grobo contains an agreement that they would not hire or poach each other’s employees.
“The survey shows that the rules of competition aren’t just about keeping prices down,” Rivera said, adding that the EU antitrust rules also help ensure “a fair labor market where employers compete for talent and do not conspire to limit the number, quality and opportunity of workers.”
Minor Stakes, Major Fines
Since July 2018, Delivery Hero has gained minority shares on Glovo. Four years later, in 2022, he gained only control of Glovo.
In June 2022, and again in November 2023, the committee conducted unpublished inspections at corporate facilities as part of a self-initiated investigation into possible collusion in the food service sector.
The committee concluded that from July 2018 to July 2022, streaming heroes and globo gradually dismantled the competitive constraints between them, replacing normal market competition with layered anti-competitive adjustments.
The infringement ended in 2022, with the delivery hero officially acquiring a majority stake in Glovo and becoming a subsidiary.
The companies have admitted to being involved in the cartel and agreed to resolve the case. This is a procedure that allows businesses to accept liability and proposed fines in 2008.
In return for cooperation and waiver of certain procedural rights, the companies received a standard 10% reduction in fines. The delivery hero costs around 223 million euros and Glovo costs 106 million euros.
I’ll share the pie
The committee’s findings were the minority shareholders’ stakeholders in Glovo, allowing and promoting illegal adjustments.
The minority shareholder created a channel for the two companies to coordinate their business and strategy, according to the survey.
“They exchanged confidential information beyond what corporate investors need to protect their financial investment decisions,” said Rivera of the committee.
The information exchanged included commercial strategies, pricing, capacity, cost, product characteristics, and organization of the rider distribution network.
“They discussed virtually everything, and of course, this can only lead them to potentially align their content with the market,” said a senior EU official.
The companies also split geographical markets across Europe. They avoided coordinating each other’s entry into national markets and market entries that neither existed, effectively eliminating direct competition between them.
Another major factor in the infringement was the agreement not to hire or approach each other’s employees actively.
“In other words, companies stop competing directly for workers. This is not good for workers because it is a type of agreement that curtails wages and reduces labor movement,” Rivera explained.
Possible development
Rivera noted that the committee will pay more attention to the competition risks posed by minority shareholder agreements.
“I don’t think that’s necessarily a bad thing. On the contrary, it might be very good,” Rivera said of the practice, making it clear that it is reasonable for shareholders to access relevant information and ensure sound investment decisions.
However, she drew a clear line of misuse of confidential information, especially when such access could limit competition in a particular sector beyond what shareholders need.
The committee will be wary of preventing such actions from occurring in other industries, she said.
