Antitrust

In a significant move targeting minority shareholding arrangements, the European Commission (“EC”) has fined food delivery giants Glovo and Delivery Hero a combined €329 million for breaching EU antitrust rules. The EC’s findings centred on the use of Delivery Hero’s non-controlling minority stake in Glovo to facilitate the alleged cartel conduct – sending a stark reminder of the risks of that may arise from information sharing and coordination connected to minority investments.  The decision also marks the first time the EC has imposed a fine for a ‘no-poach’ agreement, continuing the increasing trend for antitrust enforcement in relation to labour markets.

The decision 

On 2 June 2025, the EC found that the parties had used Delivery Hero’s non-controlling minority stake in Glovo – first acquired in 2018 and progressively increased through subsequent investments (until Delivery Hero notified the proposed acquisition of sole control in 2021) – to facilitate anticompetitive coordination in breach of EU competition law between July 2018 and July 2022 by:

• agreeing not to poach each other’s employees through reciprocal no-hire clauses in the shareholders’ agreement between the parties that were then upgraded to a general non-solicit agreement to refrain from actively approaching each other’s employees;
• exchanging commercially sensitive information via various forms of communication including Whatsapp on, for example, pricing, capacity, products and commercial strategy, to enable the companies to align and influence their market conduct; and
• allocating geographic markets by dividing up new territories for entry between themselves.

The infringement ended when Delivery Hero acquired sole control over Glovo by increasing its stake to 94%, a transaction which was approved unconditionally by the Spanish competition authority.  The EC’s investigation was prompted by an anonymous whistleblower and information received from a national competition authority, with dawn raids first conducted in June 2022 while the Spanish competition authority’s merger review was ongoing. 

Delivery Hero is required to pay a fine of ~€223 million, while Glovo must pay ~€106 million.  The parties engaged with the EC’s settlement procedure to obtain a 10% fine reduction, rendering an appeal unlikely.  The EC is not the only competition authority that has had the two companies on its radar.  In May 2019 the Egyptian competition authority accused the companies of a market allocation agreement following Glovo’s sudden exit from Egypt, which resulted in the companies agreeing to restore Glovo’s Egyptian presence and Delivery Hero committing not to use its shareholder rights to influence Glovo’s strategic decisions in Egypt.  More recently in June 2025, the Chilean competition authority requested the Chilean Competition Council impose a fine of $74 million on Delivery Hero and Glovo for a market allocation agreement which allegedly caused Glovo to leave Chile and Egypt and Delivery Hero to leave Peru and Ecuador.

A double landmark for the European Commission

This case represents two significant precedents for the EC, marking:

1. The first cartel sanctioned by the EC that was enabled by a minority equity holding, with the EC emphasising how Delivery Hero’s ~15% interest in Glovo prior to its July 2022 acquisition facilitated the three infringements outlined above, by allowing Delivery Hero “to obtain access to commercially sensitive information and to influence decision-making processes in Glovo, and ultimately to align the two companies’ respective business strategies”.

The EC’s decision highlights that while confidential information exchange and coordination between an investor and a controlled investee company are unproblematic, investors with only a non-controlling equity stake in a competing entity must manage their relations with heightened antitrust risks in mind. This is reinforced by Deutsche Post’s recent agreement to divest a 26% stake in Compador, a mail consolidation joint venture with the Max Ventures Group, to settle a cartel probe by the German Federal Cartel Office.

These risks are not confined to Europe, with the US Federal Trade Commission (“FTC”) and Department of Justice’s (“DoJ”) recent joint statement of interest in Texas v. BlackRock emphasising the potential antitrust risks of facilitating coordinated conduct among competing investment interests, even where the investors hold less than a controlling stake.  The statement of interest focuses on the “investment exception” under section 7 of the Clayton Act, with the US agencies taking the position that “even initially passive investors can take themselves out of the exception by using or attempting to use their stock investments in multiple competitors to harm competition.” While the alleged conspirators in BlackRock hold no ownership stake in each other, the FTC and DoJ allege that “a single entity with holdings in multiple competitors can engage in [] anticompetitive behavior” and even a minority investor “may violate Section 7 by using, or attempting to use, the acquired stock to cause anticompetitive effects.”  Moreover, renewed interest in policing interlocking directorates further demonstrates the FTC’s and DoJ’s focus on the potential influence of minority shareholders on competition.

2. The first no-poach and labour market case for the EC, coming on the back of its May 2024 Competition Policy Brief which indicated that wage fixing and ‘non-solicit’ or ‘non-hire’ agreements are considered “by object” restrictions of Article 101 TFEU, meaning they are illegal on their face and do not require a finding of harm.  Executive Vice-President Teresa Ribera emphasised the EC’s commitment to fair labour markets in her remarks about the case on 2 June 2025.

Labour market antitrust enforcement has now moved from theory to action globally, with investors and deal teams needing to actively consider related risks.  The EU trends dovetail with heightened scrutiny of labour market issues leading to enforcement action in several Member States, including Belgium, France, Portugal, Slovakia, Spain, as well as in the UK. 

They also mirror developments in the US, where no-poach and wage-fixing agreements have been an enforcement priority for the FTC and DoJ for several years.  While DoJ initially struggled to secure convictions in criminal no-poach cases, DoJ has successfully pursued civil no-poach cases and recently secured its first criminal wage-fixing conviction in United States v Lopez.  DoJ’s success in Lopez will likely fuel continued attention in labour market enforcement.  AAG Slater has made clear that DoJ will prioritize “protecting workers” and the FTC launched a task force focused on “rooting out and prosecuting deceptive, unfair, and anticompetitive labour-market practices”.

Key takeaways for investors

As well as highlighting the increasing antitrust risks associated with no-poach agreements, there are a number of practical takeaways stemming from the EC’s decision for institutional investors, private equity firms and other businesses holding minority interests in competing companies:

1. Monitor and assess antitrust risks across the portfolio. When making a minority investment, consider whether the target is a competitor (or a competitor of a portfolio company), both in advance of the deal and throughout the lifetime of the investment, so that arrangements can be tailored or adjusted accordingly.  This is particularly important for private equity investors, which need to consider the overlapping activities of their controlled portfolio companies throughout the hold period of any minority investment.
2. Structure governance and information flows to mitigate enforcement risk. Where a minority investment in a competing entity is contemplated, deal teams should carefully consider if governance rights might create avenues for inappropriate access to competitively sensitive information, mitigating against such risks through firewalls and clean team arrangements. Where board representation exists, investor directors must be conscious of antitrust risks in their interactions with the non-controlled entity, as well as any applicable restrictions on cross-directorships.
3. All communications potentially caught.  As well as emails, Whatsapp chats were used as a means of proving illegal exchanges of commercially sensitive information between Delivery Hero and Glovo.  This serves as an important reminder to investors to be wary of any communications with competitors and be careful not to share any sensitive information, regardless of the medium, as regulators have the authority to request all forms of communication as evidence.