The European Commission has delivered a clear message to the European digital ecosystem: competition also applies in the world of platforms. In a historic case, Glovo and its parent company Delivery Hero, two prominent names in home delivery services, have been fined a total of €359 million for participating in an illegal cartel that operated for four years within the European Economic Area.
As explained by the Commission, their investigations revealed that between July 2018 and July 2022, both companies engaged in three types of anticompetitive conduct:
The most delicate aspect of the case is that these practices were made possible by the fact that Delivery Hero acquired a minority stake in Glovo before assuming full control of the company in 2022. Although this investment is legal in itself, it facilitated a level of access and influence that the Commission considers excessive and harmful to competition.
Let us remember that the German Delivery Hero is a global giant in food delivery services, listed on the Frankfurt Stock Exchange, and present in more than 70 countries, 16 of them in the European Economic Area. It collaborates with hundreds of thousands of restaurants. Meanwhile, Glovo, based in Spain, is present in more than 20 countries, 8 of them in the EEA.
The fines have been calculated according to the 2006 guidelines and include a 10% reduction for acknowledging responsibility:
Both companies acknowledged their participation in the cartel and opted for the simplified settlement procedure, which expedited the resolution and reduced the total amount. However, in addition to the fine, the Commission’s decision allows any affected party (users, competitors, former employees) to claim damages in national courts, which could pave the way for litigation by companies whose growth or talent was limited by this agreement.
As explained by the European Vice President, the Spaniard Teresa Ribera: “The parties agreed not to hire each other’s employees, exchanged information, and allocated geographic markets within the EEA. This case is important because these practices were facilitated through the anticompetitive use of Delivery Hero’s minority shareholding in Glovo. Additionally, it is the first time the Commission has sanctioned a no-poaching agreement, in which companies cease to compete for the best talent and reduce opportunities for workers.”
Although the past couple of years have seen fines, sanctions, and investigations against digital giants (Meta, Google, Amazon…) come one after another, this case establishes two unprecedented legal precedents:
It is the first time the Commission has sanctioned a labor cartel, that is, an agreement between companies to not compete for talent. By restricting employee mobility, professional development is limited in a sector already under pressure for lack of qualified profiles.
And it is also the first time the anticompetitive use of a minority stake in a rival company has been penalized. That is, the Commission estimates that consumers might have paid more or had fewer choices on their favorite delivery platforms due to this covert coordination. Moreover, by dividing markets and not competing for talent, platforms reduce the pressure to innovate or improve conditions for partners and users.
Source: European Comission
As you might imagine, this combination poses new alerts for any company with cross-investments in competing companies, especially in high-growth markets such as delivery, mobility, or marketplaces. Even without majority control, an investment can have anticompetitive implications if it allows influencing strategic decisions or accessing confidential information.
For startups operating in similar verticals — logistics, mobility, travel, fintech — this necessitates a careful review of partner agreements, non-compete clauses, and commercial agreements.
Image: ChatGPT
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