EU slaps mega fine on Delivery Hero in first no-poach labor cartel probe

The European Commission has doled out a total of €329 million in fines to online food delivery group Delivery Hero and its subsidiary Glovo for operating a cartel in the run-up to their 2022 merger.

The Commission said that Germany-based Delivery Hero illegally shared sensitive information with rival Glovo over the course of four years as part of a strategy to box-out competitors in the fast-growing food delivery sector. 

The conduct kicked off after Delivery Hero took a minority stake in its Spanish rival in 2018, from which point it began collecting information on nearly every aspect of its rival’s business in what a Commission official labeled a ‘WhatsApp cartel’.

“This case is important because these practices were facilitated through an anti-competitive use of Delivery Hero’s minority stake in Glovo,” said Competition Commissioner Teresa Ribera in a statement.

The case marks the first time the Commission has fined a company for breaking the EU’s cartel rules around no-poach agreements signed with a competitor. Specifically, the firms agreed to hold off from recruiting white-collar employees from their rival. The no-poach agreements did not cover delivery riders.

“It is also the first time the Commission is sanctioning a no-poach agreement, where companies stop competing for the best talent and reduce opportunities for workers,” Ribera said.

Both companies admitted their involvement and agreed to settle the case, leading to a 10 percent reduction in their fines. Delivery Hero was fined €223 million, while Glovo received a €106 million penalty. Glovo has operated as a subsidiary of Delivery Hero since the 2022 merger.