Minority shareholdings and cartels: a new arena of competition law risk

September 2025 | SPOTLIGHT | COMPETITION & ANTITRUST

Financier Worldwide Magazine

September 2025 Issue

In June 2025, the European Commission (EC) fined two companies a total of €329m for participating in a cartel across the European Economic Area (EEA).

The case will have wider implications for two key ‘firsts’. It is the first time the EC has found: (i) a minority shareholding facilitated a cartel; and (ii) that ‘no poach’ agreements infringed article 101 of the Treaty on the Functioning of the European Union (TFEU) and article 53 of the EEA Agreement.

The two companies involved, Delivery Hero and Glovo (the parties), agreed to ‘settle’ the case with the EC, admitting their participation and liability in return for a 10 percent discount upon their respective fines.

As a consequence of this settlement, the EC’s decision is unlikely to be subject to appeal. Assuming it remains unchallenged, national competition authorities and courts in the EEA will be unable to take decisions that would run counter to the EC’s decision when ruling on the application of article 101 of the TFEU or article 53 of the EEA Agreement (or the equivalent provision under national competition law).

Against this background, this article considers the actions that businesses should take in the context of minority shareholdings to minimise competition law compliance risks.

Background to the EC investigation

Delivery Hero, headquartered in Germany, provides services for the delivery of food, grocery and other retail items to customers ordering from a website or an app (food delivery services) in more than 70 countries worldwide.

Similarly, Glovo, headquartered in Spain, provides food delivery services in more than 25 countries worldwide.

In July 2018, Delivery Hero acquired a minority, non-controlling shareholding of 15 percent in Glovo, which it increased over the following years to 37.4 percent by 31 December 2021 (on a fully diluted basis).

In April 2019, Glovo exited Egypt, ceasing to compete with Delivery Hero in the country. The Egyptian Competition Authority investigated this outcome, and concluded that the parties had agreed upon Glovo’s exit, in order to eliminate competition between themselves in Egypt.

In September 2020, Delivery Hero acquired Glovo’s operations in Latin America, meaning that the parties ceased to compete in three countries.

In May 2021, Glovo acquired Delivery Hero’s operations in Central and Eastern Europe, meaning that the parties ceased to compete in a further six countries.

In December 2021, Delivery Hero announced that it intended to increase its shareholding in Glovo to 80.9 percent (on a fully diluted basis), which would give it sole control of Glovo.

In July 2022, having received all required merger control clearances, Delivery Hero acquired sole control of Glovo. Two days later, the EC conducted dawn raids at the parties’ offices in the context of an investigation into a suspected cartel.

The EC’s investigation

During the four-year period from July 2018 (when Delivery Hero acquired its minority, non-controlling shareholding in Glovo) to July 2022 (when Delivery Hero acquired sole control of Glovo), the parties were independent undertakings.

However, instead of competing with each other, the EC found that the parties pursued an agreed plan. This plan, which evolved over time, saw the parties eliminating competition between themselves in relation to the provision of food delivery services within the EEA, and engaging instead in “multilayered anti-competitive coordination” in order “to be on the same side fighting off…joint competitors”.

The EC found that this plan was directly enabled by Delivery Hero’s minority shareholding in Glovo.

When Delivery Hero acquired its minority shareholding, the parties entered into a shareholders’ agreement, with subsequent shareholders’ agreements concluded as Delivery Hero increased its minority shareholding over time. These shareholders’ agreements set out de facto reciprocal ‘no hire’ clauses covering certain types of employees.

In addition, Delivery Hero’s minority shareholding provided it with: (i) representation on Glovo’s board (one board member initially, then two) enabling Delivery Hero to obtain Glovo’s board documents; and (ii) certain rights in relation to Glovo’s strategic decision making, including the ability to participate in approvals of new investment rounds in Glovo.

Moreover, the minority shareholding served to create ties between the parties’ respective staff at different levels of the two businesses, which saw staff members sharing invitations to join each other’s meetings, and resulted in focused exchanges of information between specialists in each of the businesses.

The EC acknowledged that the parties’ plan began initially in July 2018 with a ‘no poach’ arrangement, which was then supported by exchanges of competitively sensitive information (CSI) from September 2018, before being supplemented with a market sharing arrangement from January 2020.

‘No poach’ arrangements

As noted above, the shareholders’ agreements included de facto reciprocal ‘no hire’ clauses. These prevented the parties from either: (i) soliciting each other’s employees of a certain level of seniority; or (ii) hiring such employees if they were themselves to approach either of the parties (e.g., in response to an open vacancy).

In October 2018, the parties expanded this arrangement, and reached a general understanding not to solicit each other’s employees at other levels within the businesses (although they could hire these employees if they approached the business, unlike in the context of the ‘no hire’ clauses).

The EC’s focus upon this issue, in conjunction with a separate ongoing EC investigation into suspected collusion through the use of ‘no poach’ agreements in the data centre construction sector (and various other investigations recently concluded by national competition authorities in Europe, including in France and in the UK) highlights the need for businesses to ensure that their HR-related practices, such as hiring and remuneration, are compliant with applicable competition laws.

Sharing CSI

The EC found that the parties frequently exchanged CSI, enabling them to align their commercial activities. For example, Delivery Hero’s representation on the Glovo board resulted in CSI from Glovo’s board meetings being shared with Delivery Hero’s management.

In addition, a close relationship formed over time between the parties’ two executive teams, and ties between staff at different levels of the two businesses also resulted in CSI regularly being shared in meetings, on calls, by email and via social messaging platforms.

The types of CSI exchanged included: (i) current prices and future pricing intentions; (ii) current and future production capacities; (iii) commercial strategies; (iv) anticipated future demand; and (v) cost structures (e.g., customer acquisition costs, and costs per order).

Market sharing

In January 2020, the parties agreed to allocate geographic markets within the EEA. The parties implemented this agreement in three key ways: (i) they did not enter any market in which the other party was already present; (ii) they decided which of them should enter a market in which neither was present; and (iii) they removed any existing geographic overlaps, with Glovo acquiring Delivery Hero’s operations in Central and Eastern Europe (as noted above).

The EC concluded that Delivery Hero used its minority shareholding to convince Glovo to allocate markets in the EEA in two ways: (i) by using (or threatening to use) its rights over specific decisions relating to Glovo’s business; and (ii) by influencing other Glovo shareholders.

The EC held that these three infringing practices formed a single and continuous infringement of article 101 of the TFEU and article 53 of the EEA Agreement over the relevant four-year period.

Is owning a minority shareholding in a competitor unlawful?

Delivery Hero’s minority shareholding in Glovo enabled the parties to coordinate their interests during a period that may otherwise have been expected to be characterised by significant commercial uncertainty and increasing competition between the parties.

However, the EC’s decision does not mean that an investor holding a minority shareholding in a competitor will infringe EU competition law.

Back in 1987, the European Court of Justice in British American Tobacco observed that: “[t]he acquisition by one company of an equity interest in a competitor does not in itself constitute conduct restricting competition [but] such an acquisition may nevertheless serve as an instrument for influencing the commercial conduct of the companies in question so as to restrict or distort competition”.

In 2025, the comments by Teresa Ribera, executive vice president of the EC, on the cartel echo this sentiment: “[o]f course, owning a stake in a competitor is not illegal in itself. But it may be problematic when that stake is used to gain inside information and influence decisions in ways that can harm competition.”

The issue for investors to consider is how to acquire and hold a minority shareholding in an actual (or potential) competitor in such a way as to ensure that competition law compliance risks are minimised.

Addressing competition law issues upfront

In particular, investors and their advisers should consider possible competition law issues at an early stage, and proactively address these within the transaction planning.

For example, where the transaction relates to an actual (or potential) competitor, appropriate protocols should be implemented to protect CSI.

During due diligence and negotiations, formal, agreed and documented protocols are likely to include the use of ‘clean teams’ to ring-fence and restrict access to CSI, and the careful ‘de-sensitisation’ of CSI to enable this to be shared outside of designated clean teams (e.g., by aggregation or anonymisation, appropriately reviewed and approved by external competition law advisers).

Managing information flows

Post-transaction, formal, documented protocols should be agreed in advance of completion to ensure that the investor’s interest does not facilitate the sharing of CSI post-transaction. These protocols should include several key measures. First, any investor representative involved with the investee business should receive competition law compliance training. This training should enable them to identify relevant risks, including those related to human resources – such as hiring and remuneration – as well as more ‘traditional’ cartel conduct (e.g., price fixing, market sharing and bid rigging). The representative must also understand their obligation to report any competition law compliance concerns and be familiar with the appropriate reporting procedures.

Additionally, the information provided by the investee business to the investor representative should be limited by agreement to only what is necessary for the investor to protect its investment. This may include the representative recusing themselves from certain parts of board meetings where appropriate. The investor representative should also enter into a suitable non-disclosure agreement to ensure that any CSI they may inadvertently receive or deduce from their involvement with the investee business remains confidential. Moreover, the investor representative should be excluded from any of the investor’s activities that currently compete (or could potentially compete) with the investee business. This means that they should expressly be restricted from accessing CSI relating to these activities, including through the investor’s IT systems.

Reinforcing a culture of compliance

More generally, the relevant protocols should also ensure that staff within the wider businesses: (i) are aware that the businesses are and remain independent; and (ii) understand the competition law compliance risks that would result from ‘overstepping the line’, and incorrectly treating the other business as if it was a group company.

These protocols should be reviewed at regular intervals to ensure that they remain fit for purpose (including if and when the investor increases the level of its minority shareholding), and updated to reflect any ‘lessons learned’, with both the investor, as well as the investee, making this clear commitment to continuing competition law compliance.

Samuel Beighton is a partner at Gowling WLG. He can be contacted on +44 (0)20 3636 7972 or by email: samuel.beighton@gowlingwlg.com.

Samuel Beighton

Gowling WLG