Brussels imposes multi-million-dollar fines on Glovo and Delivery Hero for cartel

BrusselsBrussels has imposed a €329 million fine on delivery companies. Glovo and Delivery Hero food cartel. According to a statement from the European Commission published this Monday, both companies have breached EU competition rules. Specifically, they have reached agreements and implemented business strategies aimed at limiting or preventing competition between large multinationals in the sector operating in the EU market.

The EU executive accuses Glovo and Delivery Hero of having a commitment not to steal or compete for each other's workers. This is an understanding that both companies agreed upon when the German company acquired a minority stake in the Catalan platform. It should be remembered that in July 2022, after having entered into its capital for the first time in 2018, Delivery Hero gained control of Glovo. "Owning a stake in a competitor is not illegal in itself, but in this specific case, it allowed for anti-competitive contacts between two rival companies at various levels," the statement reads.

Furthermore, the European Commission asserts that both companies have divided geographic markets and avoided competition in some EU member states. Similarly, Brussels also indicates that they have coordinated when deciding which company should enter each new country in which they did not yet have a presence. Furthermore, the European Commission points out that the Catalan and German companies have shared sensitive commercial information regarding, for example, sales strategies, prices, capacity, costs, and product characteristics.

The Vice President of the European Commission and Minister of Competition, Teresa Ribera, emphasized in a press conference that this is the first case of a cartel to control the labor market that the EU executive has investigated and sanctioned. She argued that these practices result in "less mobility and job opportunities" and have a "negative impact on workers' wages," which are ultimately paid by consumers. "Both companies remain in their comfort zone and have no incentive to improve prices or the quality of their services," the Spanish socialist concluded.

Glovo and Delivery Hero admit to the cartel.

The European Commission has also explained that the two largest companies in the EU sector have admitted their guilt in organizing a cartel. Thus, thanks to their collaboration with the EU authorities, they have managed to reduce the financial penalties imposed by Brussels, which ultimately remain at €223 million for Delivery Hero and €105 million for Glovo.

In the case of the Catalan multinational, has already accumulated more than 200 million euros in Labor Inspection sanctions and unpaid Social Security contributions for violating the rights of its delivery workers. However, its co-founder, Oscar Pierre, promised on the eve of testifying before Barcelona's 31st Court of First Instance, accused of a criminal offense against workers, that he would change the model of false self-employment and begin hiring delivery workers as employees.

Nevertheless, Ribera has warned that the European Commission does not intend to stop in its crusade against large companies that violate EU competition regulations. "We have been clear and will continue to be clear: the European Commission will address all practices that may affect consumer rights," the Competition Minister warned.