Delivery Hero SE has agreed to pay €329 million (US$376 million) to resolve a European Union investigation into collusion with Glovo prior to completing its acquisition of the Spanish competitor.

This settlement follows findings that the two companies engaged in collusion from July 2018 to July 2022.

The investigation revealed that Delivery Hero and Glovo participated in market-sharing arrangements.

They shared sensitive commercial information via WhatsApp and agreed not to poach each other’s employees. These practices ended after Delivery Hero acquired full control of Glovo in 2022.

The EU said that Delivery Hero’s minority stake in Glovo prior to the acquisition facilitated this collusion. This case represents the first time the commission has sanctioned a no-poach agreement, which it highlighted as limiting competition in the labor market.

Delivery Hero will pay €223.3 million (US$255.57 million) of the penalty, while Glovo will cover €106 million (US$255.7 million). The fines were reduced by 10% because both companies admitted to the violations and opted to settle.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ Food delivery consolidation reflects industry-wide profitability challenges

The Delivery Hero-Glovo case highlights a broader pattern of consolidation in the food delivery sector driven by profitability pressures.

Global food delivery companies have aggressively pursued acquisitions to achieve scale, as evidenced by Delivery Hero’s previous $4 billion acquisition of South Korea’s Baemin in 2019 1.

Despite substantial market growth—with the global market expected to reach $505.5 billion by 2030 2—food delivery services operate on razor-thin margins and face steep operational costs.

These economic realities create powerful incentives for market consolidation, as companies seek economies of scale and reduced competitive pressure on pricing.

The pandemic initially boosted delivery volumes, but the industry has since stabilized at lower growth rates, increasing pressure to find sustainable business models 3.

2️⃣ No-poach agreements face intensifying global regulatory scrutiny

This landmark EU case represents a significant shift in antitrust enforcement priorities, being the first time the European Commission has explicitly sanctioned a no-poach agreement 4.