The European Commission is investigating German food delivery company Delivery Hero and its subsidiary Glovo for potential cartel formation in the food delivery sector.

Preliminary investigations started in 2022, leading to a formal procedure after office searches in Germany and Spain.

Unannounced raids were carried out on Delivery Hero and Glovo's offices in July 2022 and November 2023 by the European Commission as part of the investigation.

Delivery Hero has set aside over 400 million euros for a potential cartel fine, causing a significant drop in the company's stock price.

Concerns revolve around potential agreements on geographic market allocation and sharing sensitive information like pricing and strategies between Delivery Hero and Glovo.

This investigation marks the first by the European Commission into anti-competitive agreements involving a minority shareholding in a competitor.

Delivery Hero has pledged full cooperation with the EU Commission in the investigation of the allegations.

The Commission aims to uphold competition in the food delivery sector to ensure consumer choice and fair prices.

The food delivery industry has witnessed heightened competition, leading to market consolidation, exits, and layoffs post-pandemic.

Uber Eats and Deliveroo have emerged as dominant players in the market following the insolvency of Getir and Flink in 2023.

Market consolidation in France has resulted in mergers and acquisitions among various meal delivery companies like Flink, Cajoo, Gorillas, and others.

Glovo was fined 80 million euros in September 2022 by Spanish authorities for violations related to labor laws.