EU Commission Fines Delivery Hero & Glovo €329 Million for Online Food Delivery Cartel

Key Takeaways

• Fines Imposed: The European Commission has fined Delivery Hero €223.3 million and Glovo €105.7 million for participating in a cartel that stifled competition within the online food delivery sector in the European Economic Area (EEA).
• Cartel Practices: The companies engaged in anti-competitive behavior by agreeing not to poach each other's employees, exchanging commercially sensitive information, and dividing up geographic markets to avoid direct competition.
• Impact on Workers and Consumers: The cartel reduced job opportunities for employees and limited consumer choice, while discouraging innovation in the online food delivery market.
• First-Time Ruling: This is the first time the European Commission has sanctioned a cartel involving labor market agreements and the anti-competitive use of minority shareholding in a competing business.
• Antitrust Message: The fine underscores the Commission’s commitment to ensuring fair competition and protecting workers in dynamic markets, such as the online food delivery industry.

Deep Dive

The European Commission has fined Delivery Hero and Glovo a total of €329 million for their involvement in a cartel that spanned four years across the European Economic Area (EEA). The companies admitted to engaging in anti-competitive behavior that not only limited market competition but also restricted employee opportunities, something that’s never been sanctioned before in EU antitrust history.

This ruling is especially significant as it’s the first time the Commission has targeted cartel activity in the labor market, highlighting the rising concern over unfair competition when companies collude to suppress the freedom to hire and innovate. In a market as competitive and fast-moving as online food delivery, these practices were a direct threat to both consumers and workers alike.

For most people, food delivery is a simple convenience, a quick way to enjoy a meal without leaving the couch. But behind the scenes, two of Europe’s biggest food delivery players, Delivery Hero and Glovo, were cutting deals that undermined the core of competition. From 2018 to 2022, the companies worked together on several fronts to suppress competition and limit their own growth. Here’s how:

• No Poaching Agreement: Delivery Hero and Glovo agreed to avoid recruiting each other’s employees, effectively limiting career opportunities within the sector. This practice, hidden in plain sight, stopped workers from moving freely between these two dominant companies and stifled the potential for talent to thrive.
• Exchange of Sensitive Information: They didn’t stop at employee deals, the companies also shared critical data on pricing, capacity, product strategies, and costs. With this kind of insight, they could align their market moves and avoid competing on price or product offerings, which ultimately hurt consumers.
• Market Allocation: Perhaps the most damaging part of their cartel was the allocation of geographic markets. The companies agreed not to enter each other's territories in the EEA and even coordinated which new markets to target, essentially splitting Europe into territories to avoid direct competition.

How Did Delivery Hero and Glovo Get Here?

This isn’t just about two companies making bad decisions, this cartel was facilitated by Delivery Hero’s minority stake in Glovo, which gave them an unusual level of influence. While holding a minority share in a competitor isn’t illegal, in this case, it enabled anti-competitive behavior that manipulated both companies’ strategies. By holding that share, Delivery Hero gained access to sensitive information and had the ability to influence key business decisions at Glovo, making it easier to align their actions rather than compete.

This case is a big deal for anyone in the online food delivery business and beyond. It highlights how easily companies in competitive industries can cross the line when their interests align, even at the expense of both consumer choice and employee opportunities. And it’s a warning to other companies with similar cross-ownership structures, antitrust authorities are paying attention.

For consumers, this kind of market manipulation can result in higher prices, fewer choices, and less innovation. For workers, it means fewer opportunities to grow and move between companies, which could suppress wages and career development.

In line with the Commission’s antitrust guidelines, the fines imposed on Delivery Hero and Glovo reflect the gravity of their actions. Delivery Hero was fined €223.3 million, while Glovo received €105.7 million. The two companies also received a 10% discount on their fines for admitting their involvement and cooperating with the investigation.

This ruling is a turning point, not just in the food delivery space but for the broader regulatory landscape. The European Commission is making it clear that it will not allow companies to sidestep competition law, even if it means going after issues that seem secondary, like labor market practices.

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