Brazil antitrust watchdog questions leading delivery app iFood over market dominance

Brazil's antitrust authority scrutinizes delivery app iFood
Photo: Leonidas Santana/Shutterstock

In April last year, Brazil’s antitrust agency Cade prohibited delivery app iFood from signing exclusive contracts with restaurants and decided to further investigate allegations made by competitor Rappi. 

In February, just over a month after Uber Eats announced it was leaving the Brazilian market — partially due to iFood’s perceived monopoly over the sector — Colombian-based Rappi filed a petition requesting the termination of all exclusivity contracts iFood held with restaurants and bars. 

The company claimed that iFood’s market share would increase even further with Uber Eats’ withdrawal from the country. 

Until September last year, iFood dominated 80 percent of Brazil’s food delivery market, followed by Uber (25 percent) and Rappi (18 percent), according to data from an association of bars and restaurants.

Rappi also argued that the November shutdown of Delivery Center — a service focused on restaurants and stores in shopping malls – also justifies Cade reopening its investigation into iFood.

On Friday, iFood answered a series of questions from Cade and asked that the content be given “confidential treatment and restricted access.” Only Cade and iFood itself have access to the answers. 

Among the 11 questions sent to iFood, Cade asked for information about the number of restaurants with exclusive contracts with the platform, and the gross volume transacted (GMV) by these partners in the last three years. The regulator also wanted to know what benefits iFood offers to partners in return for exclusivity.

Indeed, Rappi has only requested the termination of iFood’s exclusivity contracts, not an end to the practice as a whole. Last year, Abrasel filed a complaint to Cade asking for the end of exclusivity deals for all platforms.

iFood wants the investigation shelved, arguing that the delivery market is dynamic and that the company is compliant with antitrust legislation. Speaking to newspaper Valor, Cade said the investigation could be closed at the end of 2022 if there is no need for further information.