Brussels also imposes fines on delivery companies.

German delivery giant Delivery Hero expects to pay a $400 million fine, according to reports in the German press.

The Commission has been investigating the case for years, and the company announced yesterday (07.07.24) in the evening that it should expect a much higher fine from Brussels. Delivery Hero (in the “international community” to which the Greek efood company belongs, according to the Delivery Hero portal) had previously set aside only €186 million for the years-long conflict with the Commission. Now the group should expect a fine of more than €400 million and is increasing its expectations accordingly, according to Handelsblatt.

The following bad news for Delivery Hero caused a short-term sell-off in the stock market. The stock, which had recently rebounded somewhat, initially fell about 17% early in the day, although the decline later eased to 6%.

Initially, the EU competition authority’s investigations focused on alleged market sharing between Delivery Hero and Spanish rival Glovo, which it acquired in early 2022.

The two companies have previously sold each other’s national businesses in order to simplify their portfolios. In 2020, for example, Delivery Hero bought Glovo’s operations in nine South American countries for around €230 million.

Delivery Hero: Also facing fine in Spain

The cartel suspicions did not stop there. Both the sharing of commercially sensitive data and the agreement to ban poaching of workers are now in question. As part of the investigation, competition authorities have raided the offices in Berlin and Barcelona twice. Delivery Hero has confirmed that it is fully cooperating with the European Commission.

Glovo isn’t the only one in the European Commission’s crosshairs. Its Spanish subsidiary Delivery Hero is also facing a fine of up to €300 million for breaching labor law. According to the report, Glovo did not treat some delivery drivers as employees.

The ongoing investigation by the European Commission and the labor law case aren’t the only problems facing Delivery Hero at the moment. The company is still looking for a CFO following the departure of Emmanuel Thomassin. Mary-Anne Popp is now taking over the role, but only on an interim basis.

Meanwhile, recent news that Chinese rival Meituan is planning to launch Keeta in Saudi Arabia has caused quite a stir. So far, Meituan has been largely focused on China, which has benefited Delivery Hero.

Analyst Clement Jeannelot of Bryan, Garnier & Co. said of the recent round of negative news: “It’s all weighing on investors’ minds and creating a climate of distrust. It makes you wonder what’s going on in the background.”