Investigation targets alleged exclusivity practices by 99 Food that could hinder rival platforms’ expansion.
The technical staff of Brazil’s antitrust watchdog, the Administrative Council for Economic Defense (CADE), has converted a complaint filed by Keeta against 99 Food into an administrative inquiry. This means the investigation will proceed within the regulator’s General Superintendence (SG). After its conclusion, the case may still be dismissed or lead to sanctions, subject to a ruling by the agency’s tribunal.
In its complaint, Keeta alleges abusive practices related to dominance in the food delivery marketplace sector. In February, Keeta—the international arm of China’s Meituan—announced it had postponed plans to enter Rio de Janeiro after encountering a more closed market than expected, due to exclusivity arrangements between competitors and restaurants.
Before CADE, Keeta claimed that “99Food is preventing partner restaurants from entering into agreements with Keeta and Rappi through financial incentives,” such that “competitors explicitly named in the contracts face a serious risk of being unable to build a sufficient network of affiliated restaurants to establish themselves in the market.”
According to Keeta, the contracts include so-called “exclusion clauses.” Restaurants that agree to them allegedly receive “significant payments.” The company requested a provisional remedy to ban such clauses.
In response to the regulator, 99 Food said it is a new entrant in the delivery market and that its strategy is pro-competitive, involving exclusivity clauses with limited duration. It also argued that restricting its approach would reinforce iFood’s market dominance and harm restaurants, couriers, and consumers.
In a technical note, the agency’s General Superintendence said the alleged conduct falls within the scope of Brazil’s competition defense system and should therefore be investigated through an administrative inquiry. The SG will analyze the contracts, assessing their rationale and potential market effects.
Regarding the request for a preliminary injunction, the SG chose not to rule due to ongoing litigation on the matter in the 3rd Business Court and Arbitration Disputes Court of the São Paulo Court of Justice (TJ-SP).
In a statement, 99 Food said it welcomes the regulator’s oversight of the market’s development.
“The authority’s role is essential to ensure conditions that allow new players, such as 99Food, to compete effectively, increasing competition and the diversity of offerings for consumers, restaurants, and couriers,”
the company said.
Source: Valor International
