A WIDELY expected investigation of Amazon’s attempt to buy a significant stake in Deliveroo was launched by Britain’s competition watchdog yesterday.

The Competition and Markets Authority (CMA) announced that it has began an inquiry into the transnational online retailer’s £450 million offer to the food-delivery company.

The CMA said that Amazon and Deliveroo had failed to address its concerns that the investment could be bad for market competition and have a negative effect on customers, restaurants and grocers.

The watchdog had warned that if the companies did not allay these concerns before December 18, it would launch an in-depth investigation, following up on an earlier preliminary inquiry.

Unions have broadly welcomed the prospect of the CMA looking more closely at the deal, with GMB national officer Mick Rix telling the Morning Star that the general union was “very sceptical” about the link-up.

Earlier this month, he said: “Amazon stifles competition and plays by different rules.

“There is no evidence to suggest that restaurants will grow or that riders will be given permanent and direct employed work.”

A spokeswoman for Deliveroo said: "We are confident that we will persuade the CMA of the facts that this minority investment will add to competition, helping restaurants to grow their businesses, creating more work for riders and increasing choice for customers.”

An Amazon spokesman said it believed the investment would “lead to more pro-consumer innovation by helping Deliveroo continue to build its world-class service.”

It would ensure that Deliveroo “remain competitive in the restaurant food-delivery space by creating more highly skilled jobs, innovating in the restaurant food-delivery sector and developing new products for customers,” the spokesman added.