Delivery Hero, Glovo hit with $376 million EU antitrust fine

By Foo Yun Chee

BRUSSELS (Reuters) -German online food takeaway company Delivery Hero and its Spanish unit Glovo were fined 329 million euros ($376 million) for taking part in a cartel which included an agreement not to poach each other's employees, EU regulators said on Monday.

The move came after a year-long investigation by the European Commission prompted by two dawn raids in 2023.

The EU competition enforcer said the cartel operated from July 2018 to July 2022, the same period as Delivery Hero increased its minority stake in Glovo to 94% in July 2022.

The companies admitted wrongdoing in exchange for a 10% cut in their fines.

"This case is important because these practices were facilitated through an anticompetitive use of Delivery Hero's minority stake in Glovo," EU antitrust chief Teresa Ribera said in a statement.

"It is also the first time the Commission is sanctioning no-poach agreements, where companies stop competing for the best talent and reduce opportunities for workers," she said.

Regulators said a shareholder's agreement between the two companies signed when Delivery Hero took a minority stake in Glovo contained limited reciprocal no-hire clauses for certain employees which was then expanded to a general no-poach deal.

The companies also exchanged information on prices, commercial strategies, capacity, costs and divided national markets in Europe among themselves.

Delivery Hero's fine was 223 million euros and Glovo 105.7 million euros. The total fine is about 20% less than the more than 400 million euro provision set aside by Delivery Hero last year.

The company said this was due to the Commission acknowledging "a lower intensity of the issues investigated for some periods."

"The remaining provision will be released and normalized through management adjustments without impacting the company's Adjusted EBITDA for the period," Delivery Hero said in a statement, referring to earnings before interest, taxes, depreciation and amortisation.

Delivery Hero is present in more than 70 countries worldwide, including 16 in Europe, while Glovo is active in more than 20 countries globally, including 8 in Europe.

($1 = 0.8754 euros)

(Reporting by Foo Yun Chee, editing by Bart Meijer and Louise Heavens)