Berlin-based food delivery giant Delivery Hero has warned investors it may “ultimately” face an antitrust fine of up to €400 million.

The development, reported earlier by Reuters, follows unannounced raids by European Union authorities on the offices of Delivery Hero and its Spanish subsidiary Glovo back in November 2023 and July 2022.

The EU did not name the companies at the time, though both confirmed the inspections had taken place. The European Commission said it had concerns over potential breaches of competition laws against forming cartels and other restrictive business practices.

In a note to investors issued on Sunday evening local time, Delivery Hero said it could face the sanction for “alleged anti-competitive agreement to share national markets, exchanges of commercially sensitive information and no-poach agreements”. 

In its annual report last year, Delivery Hero said it had set aside €186M following the unannounced inspections in the EU.

“The intent to increase the provision is based on recent informal engagement with the European Commission and subsequent detailed analysis,” it wrote, explaining the increased amount it’s set aside. “Delivery Hero intends to fully cooperate with the European Commission as it did during the unannounced inspections in July 2022 and November 2023.”

The German giant acquired a majority stake in Glovo at the end of 2021 — about half a year after the Spanish rival had shelled out to roll up three of its sub-brands.

Fast-paced consolidation has been a staple feature of the thin-margin food delivery space as players have jockeyed to grab the top (one or two) positions in markets in the hopes of making the economics stack up.

Post-pandemic, we’ve seen scores of market exits and a string of business shutting up shop after the pandemic boom for food delivery became a distant memory — underscoring quite how challenging the food delivery business model is.