The Federal Trade Commission (FTC) is investigating an agreement made in May between Uber and GoPuff that allows consumers to order items from the e-commerce delivery retailer via the UberEats delivery app, according to The Information.
The investigation — which opened at the end of June and is being handled by the FTC’s New York team — is reportedly examining whether the arrangement limits competition within online sales of alcohol and convenience store items.
In addition to examining Uber’s partnership with GoPuff, the FTC’s New York office is conducting a separate but concurrent investigation of Uber’s $1.1 billion planned purchase of e-commerce alcohol-delivery platform Drizly that was announced in February, according to the same report.
“The FTC is concerned that the GoPuff and Drizly deals will give Uber too much control over the market for online sales and delivery of convenience-store items and alcohol,” the report states, citing “two people familiar with the matter” and a document seen by The Information.
Ultimately, the FTC probe, should it determine that Uber’s acquisition of Drizly or partnership with GoPuff creates an anti-competitive environment, could lead to a settlement to satisfy the agency’s concerns, or to lawsuits that could threaten either partnership.
Through its partnership with GoPuff, Uber gained access to a network of brick-and-mortar stores, including West Coast alcoholic beverage retailer BevMo and Kentucky-based Liquor Barn. The Information notes that the investigation of Uber’s partnership with GoPuff is “one of the rare instances” in which federal regulators investigate a deal that is neither an acquisition nor an investment.
Last year, Uber acquired its previous competitor Postmates for $2.65 billion. UberEats is the nation’s second largest delivery service, claiming a 23% share of June 2021 sales, trailing just DoorDash (56%), according to Bloomberg Second Measure.
The inquiries by the FTC preceded President Joe Biden’s executive order calling for the restoration of competition in several industries, including the beer industry. That order calls on Secretary of the Treasury Janet Yellen, Attorney General Merrick Garland and Federal Trade Commission Chair Lina Khan to assess the state of competition in the current market structure of the U.S. beer, wine and spirits industries and submit their findings to the White House Competition Council.