Glovo and parent company fined €329m for abusive practices in food delivery sector

The European Commission (EC) has fined Glovo and its parent company, German firm Delivery Hero, €329 million for abusive practices in the food delivery sector.

Following an investigation that started in July last year, the European executive concluded that both companies shared "sensitive" information, agreed "not to poach employees," and split markets before their merger in 2022.

Most of the total fine, €223.3 million, is for Delivery Hero, while the remaining €105.7 million is for Glovo.

According to Brussels, the size of the fine took into account elements such as the nature of the cartel, the fact that it affected the entire European Economic Area, its duration, and its evolution over time.

The actions took place between July 2018 and July 2022, and were made possible by Delivery Hero's entry into Glovo's shareholder base after the German multinational acquired a minority stake in the Barcelona-based company in 2018.

An EC statement published on Monday said that Delivery Hero and Glovo "progressively eliminated competitive restrictions between them" and "replaced competition with anti-competitive coordination at various levels."

During the four years that these practices were carried out, both firms agreed not to "steal" workers and to exchange "sensitive" commercial information - on prices, capacities, costs, and product characteristics - to align their interests and "influence the behavior of their respective markets."

The companies agreed to share several national markets for their services to "eliminate all existing geographic overlaps between them" and, at the same time, "coordinate which of them should enter markets in which neither was present."

While the European Commission points out that owning a stake in a competitor "is not illegal," it clarifies that, in this specific case, Delivery Hero's entry into Glovo allowed "anti-competitive contacts between the two rival companies."

"It also allowed Delivery Hero to gain access to sensitive commercial information and influence Glovo's decision-making processes and align business strategies," it adds.

"This shows that cross-ownership between competitors can pose antitrust risks and must be treated with care," the statement concludes.