Amazon.com Inc.’s recent moves in the food delivery market have drawn scrutiny from U.K. regulators.

The Competition and Markets Authority, Britain’s antitrust watchdog, today announced that it has frozen the retail giant’s May investment into London food delivery startup Deliveroo.

Amazon led a $575 million Series G funding round for the startup, which is incorporated as Roofoods Ltd. The cash injection also included contributions from other backers, including T. Rowe Price Group. 

The CMA paused the investment over suspicions that Amazon and Deliveroo have “ceased to be distinct” or may become so in the future. Besides pausing the deal, the order also prohibits the companies to perform certain business activities. 

The directive bans Deliveroo from exchanging sensitive information with Amazon, integrating its technology infrastructure with the online retail giant’s systems and transferring employees. The companies will also be required to request advanced written permission from the CMA for changes such as executive appointments. In the case of Amazon, the order applies only to its U.K. and European Union subsidiaries.

The freeze is intended to give CMA officials time to review if the investment breaches competition laws. Amazon led the funding round into Deliveroo after reportedly making an unsuccessful attempt to buy the startup in 2018. The prospect of an acquisition would likely still be on the table if the investment is approved, perhaps even more so than before, which might be one of the factors that have regulators worried.

Amazon and Deliveroo, for their part, argue that the deal would have a positive effect on the market. “There are a number of major companies within the restaurant food delivery sector and this investment will enable Deliveroo to expand, innovate and, we believe, will enhance competition,” the startup said in a statement. “This investment will help create jobs, help restaurants to grow their businesses and will improve choice for consumers.”

Deliveroo has a network of 60,000 couriers who deliver food to consumers’ homes from more than 80,000 restaurants, mostly in Europe. It competes with players such as Uber Technologies Inc., Lyft Inc. and Postmates Inc., which filed to go public earlier this year.

Amazon was on the list too until November, when it shut down its Restaurants food delivery service in the U.K. The online retail giant went on to shutter the U.S. version as well last month. If it’s ultimately approved by the CMA, the Deliveroo investment would give the online retail giant a second chance to take on Uber and Lyft in this fast-growing market. 

Photo: Deliveroo