Berlin-based food delivery giant Delivery Hero has cautioned investors that it may ultimately incur an antitrust fine of up to €400 million.
The development, as earlier reported by Reuters, stems from unannounced raids conducted by European Union authorities at the offices of Delivery Hero and its Spanish subsidiary Glovo in July 2022 and November 2023.
Although the companies were not named by the EU at the time, both confirmed the inspections. The European Commission expressed concerns regarding potential violations of competition laws related to forming cartels and other restrictive business practices.
In a statement to investors released on Sunday evening local time, Delivery Hero stated that the potential sanction could be for an alleged anti-competitive agreement to share national markets, exchanges of commercially sensitive information, and no-poach agreements.
In its annual report from last year, Delivery Hero disclosed that it had set aside €186 million in response to the EU inspections. The company plans to increase this provision following informal discussions with the European Commission and further analysis.
The German company, which acquired a majority stake in Glovo at the end of 2021, engaged in rapid consolidation within the competitive food delivery sector. This move occurred shortly after Glovo consolidated three of its sub-brands.
The food delivery industry has witnessed intense consolidation post-pandemic as companies strive to secure leading positions in markets with thin profit margins. The challenges of the food delivery business model were magnified as numerous players exited the market and businesses closed following the decline of lockdown-induced demand.
