Finally, Delivery Hero and Glovo Pay a Hefty Penalty for their Secret Cartel: €223 Million Fine Announced
Unlawful Drug Trafficking Syndicate: Delivery Hero Hit with €223 Million Penalty - Unlawful Cartel Slapped with Penalty: Delivery Hero Faces 223 Million Dollar Fine
Delivery Hero, the food delivery service giant from Berlin, got slapped with a hefty €223 million fine. The EU Commission made the announcement, stating that the company, along with Glovo, another industry player headquartered in Spain, were guilty of forming an illegal cartel. Glovo has to pay a fine of €106 million.
The reason for the fine? The companies engaged in some shady business practices, including fixing prices, strategizing, and even keeping each other's employees off the market. The Commission discovered these agreements took place via email and WhatsApp messages.
In a press release, EU Commissioner for Fair Competition Teresa Ribera shared that this is the first time the Commission has penalized companies for employee agreements, setting the stage for a fair workers' market. Employers will no longer be able to collude to limit job opportunities for workers.
It's worth noting that the Commission didn't comment on the specific impact on German consumers or competitors. However, an official mentioned that Delivery Hero is active in the German market, while Glovo isn't.
The undercover operation has been ongoing for some time. Back in November 2023, the Commission conducted surprise inspections at Delivery Hero in Berlin and Glovo in Barcelona. Delivery Hero claimed they had fully cooperated with the Commission during the investigation. Interestingly, Delivery Hero held a minority stake in Glovo from July 2018 until they took over full control in July 2022. The Commission believes these agreements took place before the acquisition, and both companies have acknowledged their involvement in the cartel.
Surprisingly, Delivery Hero expected a much higher fine – potentially more than €400 million. Before the announcement, the Berlin-based company had set aside €186 million for the conflict. The final fine of €329 million is approximately 20% lower than anticipated, partly because the Commission recognized that the criticized behavior was less intense during certain periods.
Delivery Hero and Glovo rank among the biggest players in the European food delivery market, also offering deliveries of other products.
- Antitrust Violations
- Delivery Hero
- Employees Poaching
- Berlin
- Brussels
- Barcelona
- Illegal Cartel
- EU
- Cartel Agreements
- EU Commission
- Labor Market
- Penalties
- Teresa Ribera
Insights:
Employees in the food delivery sector may have faced restricted mobility as a result of the cartel agreements between Delivery Hero and Glovo. The EU's punishment aims to prevent such anti-competitive practices, fostering a more dynamic labor market and encouraging better working conditions and wages for workers. Furthermore, the EU's intervention promotes competition in the European food delivery market, leading to more innovative services and better prices for consumers. The action serves as a warning to companies about the consequences of engaging in antitrust activities and upholding fair competition within the market.
- The EU's penalty towards Delivery Hero and Glovo for their involvement in an illegal cartel aims to prevent restrictions in the mobility of employees within the food delivery sector, fostering a more dynamic labor market.
- The EU's intervention in the cartel agreements between Delivery Hero and Glovo promotes competition within the European food delivery market, potentially leading to more innovative services and better prices for consumers.
