Shares of Delivery Hero SE, one of the world’s largest food delivery companies, plummeted more than 17% at one point today on concerns that it could face a steep antitrust fine.

The company ended the trading session with its stock price down 7.2%.

Berlin-based Delivery Hero launched in 2011 and went public six years later. It operates more than a dozen food delivery services supported by hundreds of logistics facilities. The company generated €3 billion in revenue across those services last quarter, 21% more than a year earlier, but it has not yet turned a profit.

Today’s share selloff followed Delivery Hero’s disclosure on Sunday that it could be fined more than €400 million, or $433 million, by the European Commission. Antitrust officials are said to be concerned about an “alleged anti-competitive agreement to share national markets, exchanges of commercially sensitive information and no-poach agreements.” Delivery Hero didn’t elaborate. 

According to a Jefferies Group LLC research note cited by Reuters, the fine may stem from a recent series of transactions between Delivery Hero and Glovo, a fellow food delivery provider. 

In 2020, Delivery Hero inked a €230 million deal to acquire Glovo’s Latin America business. The following year, Glovo purchased three food delivery services originally operated by Delivery Hero for €170 million. Finally, in 2022, Delivery Hero acquired a majority stake in Glovo.

Around the time that the majority stake changed hands, European Union competition officials carried out unannounced inspections at the two companies’ offices. A second round of inspections followed last year. The European Commission stated at the time that it was looking into “alleged market allocations” as well as “additional conduct in the form of alleged no-poach agreements and exchanges of commercially sensitive information.”

In response to the inspections, Delivery Hero set aside €186 million to cover regulatory costs. In its Sunday warning about the potential antitrust fine, the company stated that it intends to increase this sum. Jefferies’ note stated that the main challenge for Delivery Hero is not the size of the penalty or its ability to cover the cost but rather “the fact pattern that it creates.”

Delivery Hero joins the growing list of tech companies facing regulatory scrutiny in the European Union. Last week, the European Commission asked Amazon.com Inc. for information about its compliance with the bloc’s Digital Services Act. A few days earlier, officials tentatively determined that Meta Platforms Inc. has breached a related piece of legislation known as the Digital Markets Act. 

Photo: Delivery Hero