Just over a month after Uber announced it will operate in the Brazilian food delivery market only until March 7, delivery company Rappi filed a new petition with the Administrative Council for Economic Defense (Cade), Brazil’s antitrust regulator, defending the termination of all exclusivity contracts held by iFood with restaurants and bars.
In the document, Rappi asks the watchdog to review a provisional measure from March last year, which establishes the blocking of new exclusive contracts of iFood with restaurants, keeping the agreements prior to the determination.
Until September last year, iFood had 80% of the food delivery market in the country, followed by Uber (25%) and Rappi (18%), according to data from the Brazilian Association of Bars and Restaurants (Abrasel).
Uber’s exit from this sector and the shutdown of the Delivery Center are Rappi’s main arguments to request the reopening of the case by Cade. The Delivery Center was a service focused on restaurants and shopping malls stores, which had BRMalls and Multiplan among its partners – it closed the operation in November.
According to Rappi, the moves are “evidence that, even with the preventive action of Cade, the practices of iFood continue to damage the market, requiring the adoption of new restrictions by the regulator.”
The president of Abrasel, Paulo Solmucci, criticized Rappi’s position in defending only the end of iFood’s exclusivity with stores because the company also operates with exclusive contracts.
“If Rappi was genuinely in a pro-market movement it should enter as an interested third party in our lawsuit and ask for the end of exclusivity as a whole,” Mr. Solmucci told Valor.
Abrasel filed its own request in December 2020, advocating for an end to all exclusive contracts between food delivery apps — in addition to enter as an interested party in Rappi’s lawsuit against iFood with Cade in September. “The genuine speech that Abrasel would applaud is that of a healthy market and free competition,” says Mr. Solmucci.
The new petition filed Tuesday by Rappi asks Cade to suspend the requirement of a termination fine for the breach of exclusivity of all contracts concluded by iFood with restaurants. “In the case of contracts that have specific investments in infrastructure, the rescission fine may not exceed the amount invested.”
The document also mentions a recent decision by the Norwegian competition authority to prevent Delivery Hero, which operates the online delivery platform Foodora in that country, from entering into exclusive contracts with stores for a period of three years.
In a note, iFood said that “the online delivery market is constantly evolving, with frequent entry of new competitors and the emergence of new business models,” that its commercial policies “are in strict compliance with the competition legislation” and that it “will continue to cooperate with the authorities in charge of the matter.”