The Competition and Markets Authority has said Just Eat’s proposed acquisition of Hungryhouse faces an in-depth investigation - unless the company can address competition concerns.
The CMA said its initial investigation has found that the companies are close competitors because of the similarity of their service and their broad geographical coverage.
The CMA also believes that more recent entrants to this market offering delivery services - such as Deliveroo, UberEATS and Amazon Restaurants - represent less direct competition to the companies as these tend to target different types of restaurant and that these recent entrants also offer less extensive geographic coverage than Just Eat and Hungryhouse.
The CMA said it was therefore concerned that the loss of competition resulting from the Just Eat/Hungryhouse merger may result in worse terms for restaurants using either of the two companies.
The merger will now be referred for an in-depth phase 2 unless Just Eat is able to offer undertakings which sufficiently address the CMA’s competition concerns.
Just Eat has until 17 May 2017 to respond.
The company issued a statement following the CMA’s announcement.
It said: ”Just Eat notes the CMA’s decision that it intends to refer its review of Just Eat’s proposed acquisition of Hungryhouse to a “Phase 2” investigation. Just Eat looks forward to cooperating with the CMA and is committed to demonstrating to the CMA that the market is, and will remain, competitive following completion of the proposed transaction.
”In the meantime, Just Eat will continue to operate its business as usual.”