German online food delivery giant Delivery Hero faces a potential €400 million fine over antitrust violations

German online food delivery giant Delivery Hero revealed on Sunday that it may face a fine from the European Commission over alleged antitrust violations. The Berlin-based company told investors that it could be fined over €400 million ($433 million) due to an investigation into anti-competitive practices.

Following the announcement, Delivery Hero’s shares plummeted, dropping as much as 17.4% in early trading on Monday. By 1043 GMT, the shares had recovered slightly but were still down by approximately 6%.

The potential fine stems from accusations of an “anti-competitive agreement to share national markets, exchanges of commercially sensitive information, and no-poach agreements,” Reuters reported, citing a company statement issued Sunday evening.

Delivery Hero has pledged to cooperate fully with the Commission’s investigation, as it did during unannounced raids in July 2022 and November 2023. The company also stated that it would significantly increase its corresponding financial provision, which had previously been set at €186 million.

The timing of the potential fine remains unclear, and the European Commission has declined to comment on the ongoing investigation.

Analysts at Jefferies noted that the primary concern for Delivery Hero is not the fine’s financial impact but the broader implications it could have on the company’s reputation and operations. They pointed out that the investigation likely relates to the sale of Delivery Hero’s Balkans business to Glovo in May 2021. Delivery Hero acquired a majority stake in Glovo later that year.

When asked for further details on the potential fine, Delivery Hero referred to its Sunday statement. This latest development is part of a series of regulatory challenges for Delivery Hero and Glovo. In September 2022, Spain’s labor ministry fined Glovo for failing to comply with laws requiring food delivery firms to formally hire their riders. Additionally, EU antitrust regulators conducted raids on both companies’ headquarters late last year as part of a broader investigation into their hiring practices and information sharing.

We covered DeliveryHero back in May after Uber announced it had agreed to acquire rival Delivery Hero’s Foodpanda Taiwan business for $1.25 billion. The deal would make the Silicon Valley company the dominant player in Taiwan’s food delivery market.

Over the years, Delivery Hero has acquired at least 20 companies to maintain its position as the leading food delivery platform in the world. Founded in 2011 by CJ Foo, Claude Ritter, David Bailey, Kolja Hebenstreit, Markus Fuhrmann, Nikita Fahrenholz, Niklas Ostberg, and Tracy Richardson, Delivery Hero is a network of online food ordering sites with over 100 restaurant partners, operating in 21 countries and with over 73,000 restaurant partners.