Britain's competition probe into Amazon's minority investment in food delivery service Deliveroo is "speculative" and not grounded in evidence, the two companies argued Wednesday.
The pair claimed that the Phase 1 investigation by the Competition and Markets Authority (CMA) into Amazon's stake in the U.K. start-up failed to provide evidence of existing competition between the firms.
Amazon was the lead investor in Deliveroo's $575 million funding round, announced back in May. Its stake, thought to be worth roughly $500 million, has since been frozen by the regulator as it conducts an investigation into alleged competition concerns raised by the deal.
In written submission from Amazon and Deliveroo released by the antitrust watchdog on Wednesday, the two companies said that the CMA's probe "does not produce any credible evidence of existing competition" between them and "largely focusses on notional loss of potential future competition."
"These theories of harm are speculative and not supported by evidence," the document, which has been heavily redacted in certain sections, continued. "On the contrary, they are directly undermined by the evidence."
Amazon has operated an online takeout business in the past, called Amazon Restaurants, but it shuttered U.K. operations in 2018 and closed down completely last year. The CMA has argued that Deliveroo's cash injection from Amazon could reduce competition by removing the possibility of the e-commerce giant re-entering the market.
Both companies disputed the suggestion that Amazon would be hesitant to re-enter the U.K. market alone as a result of the deal. They also pointed out the possibility for other players like U.S. firm DoorDash and Spanish start-up Glovo to enter the British food delivery space.
Amazon and Deliveroo both pushed back on claims that their businesses overlap, arguing Deliveroo offers "on-demand" grocery deliveries while Amazon's offering operates in "one or two hour scheduled windows." They also said there was no possibility of Amazon having considerable influence over Deliveroo's board as the firm is only entitled to appoint one director.
Online food delivery has seen intensifying competition with a variety of players operating in the fast-growing space, from GrubHub to Uber Eats. But there are signs the market is consolidating. Uber earlier this month announced it would sell its Eats business in India to local operator Zomato.
But in Europe, regulatory action threatens to put a hold on significant consolidation. The CMA last week announced a surprise review of Dutch firm Takeaway.com's £6.2 billion ($8.1 billion) takeover of British rival Just Eat, throwing the deal into doubt. Both companies plan on going ahead with the merger, but have now delayed the joint listing of their shares by a week.
The U.K. competition regulator has now drawn the ire of Deliveroo shareholders Index Ventures and Accel, who on Tuesday warned its competition probe into the $575 million deal could in fact inhibit Britain's tech firms from competing for venture capital funding. The Amazon-led round contributed to a record $13.2 billion raised by U.K. start-ups last year.