Amazon’s planned investment in Deliveroo, which includes a minority stake in the online food courier, has moved a step closer to being potentially blocked by a UK regulator.

The Competition and Markets Authority (CMA) had given the companies five days earlier this month to address concerns that the deal could lead to customers and businesses facing higher prices and poorer service.

But the watchdog said in a statement on Friday that it had received no undertakings from the pair and it was to begin a so-called phase two inquiry.

Asda and Sainsburys
Image: The CMA has previously blocked a planned merger between Asda and Sainsbury’s

Such an investigation can last for months and could ultimately recommend the deal is blocked.

It was the result of a £450m fund-raising by Deliveroo earlier this year as it sought to expand in a rapidly growing market alongside rivals including Just Eat and Uber Eats.

The CMA’s fears of restricted competition also extend to the belief that Amazon, which closed its own food delivery business Amazon Restaurants UK in 2018, may be discouraged from entering the sector again on its own should the investment be allowed.

Deliveroo, which was yet to comment on the decision, has argued the tie-up will bolster competition and help restaurants grow their businesses in a boost for the UK economy at a time when parts of the restaurant sector have struggled.