The European Commission (EC) has concluded its antitrust investigation of food takeaway company Delivery Hero and its Spanish business unit Glovo, issuing a combined €329 million (US$374 million) fine for participating in a cartel in the online food delivery sector. 

The companies are found to have engaged in a cartel that included no-poach agreements, market allocation, and the exchange of sensitive business information in an infringement that lasted four years.

EU authorities note that such cartels constrain choice for consumers and business partners while reducing opportunities for employees and incentives to compete and innovate.

The investigation began in June 2022 and focused on agreements between Delivery Hero and Glovo in the European Economic Area before the Berlin-based food delivery company fully acquired Glovo the same year.

The EC found that both companies “progressively removed competitive constraints” from July 2018 until July 2022. This includes agreements not to hire each other’s staff and sharing commercially sensitive information such as pricing strategies, costs, and product characteristics.

“This case is important because these practices were facilitated through an anticompetitive use of Delivery Hero’s minority stake in Glovo. It is also the first time the Commission is sanctioning a no-poach agreement, wher companies stop competing for the best talent and reduce opportunities for workers,” says Teresa Ribera, executive VP for Clean, Just and Competitive Transition.

Anti-competition crackdown

Following the EC’s decision, Delivery Hero confirmed that it has reached a settlement agreement that closes the case. The company says it has fully cooperated with the authorities during the investigation and initially set aside a provision of €400 million (US$455 million) for the case.

“The final settlement amount is nearly 20% lower than anticipated and reflects, among other things, that the Commission acknowledged a lower intensity of the issues investigated for some periods,” reads the statement.

Glovo, based in Barcelona, has received a €106 million (US$120 million) fine as part of the same investigation. Delivery Hero acquired a minority stake in Glovo in 2018 before taking full ownership in 2022.

The Commission previously noted that the investigation is part of its more significant effort to ensure that online food and grocery delivery offers users choice and fair prices.

Additionally, it wants to ensure a free labor market in which employers do not collude to restrict the number and quality of job opportunities for job seekers but compete for talent.