Chinese Meituan’s brand accuses rival of offering financial incentives in exchange for exclusivity.
The complaint filed by Keeta, the international delivery brand of China’s Meituan, against 99Food at Brazil’s antitrust watchdog (CADE) could face hurdles due to the rival’s limited market share, according to a source familiar with the matter. The platform asked CADE to investigate, alleging that 99 has been using “anticompetitive clauses” in contracts that prevent restaurants from working with other companies in exchange for financial incentives.
According to the source, the course of the probe at the antitrust watchdog will depend on the definition of the relevant market. In this view, 99Food’s lack of significant market presence could complicate the analysis. The market leader in Brazil is iFood, with a 70% share, according to Euromonitor International. Neither 99Food nor CADE commented.
China’s largest delivery company, Meituan, announced its entry into Brazil in May with an investment package of R$5.6 billion. Operations are expected to start in November. In mid-August, the company filed a lawsuit in São Paulo’s Central Court accusing 99Food of anticompetitive practices.
According to the case, 99 has been imposing contract clauses that prevent restaurants from working with Keeta and, in some cases, with Rappi, in exchange for financial benefits. Rappi said it does not comment on legal actions filed by competitors.
The move was supported by the Brazilian Association of Bars and Restaurants (ABRASEL). In a statement, the entity said it “stands against any type of exclusivity contract or practice that configures a protected market, as such mechanisms harm entrepreneurs’ freedom of choice, limit innovation and competitiveness, and harm consumers.”
Francisco Todorov, partner at TG&N and counsel to Keeta in the antitrust regulator case, said the legal actions have distinct goals.
“In court, the damages caused exclusively to Keeta will be analyzed. CADE, in turn, will evaluate how this conduct affects competition in the market.”
For Mr. Todorov, market share should not be an obstacle for the antitrust watchdog to proceed. “If there is an anticompetitive effect, CADE has to investigate, regardless of whether the player holds the largest market share,” he said.
Owned by China’s mobility company DiDi, 99 announced this year that it would resume its meal delivery operations in Brazil, with R$1 billion in investments, after shutting them down in 2023. The service is active in Goiânia and launched in São Paulo and its metropolitan area in August.
“They [99] are trying to reproduce the effect CADE already sought to avoid,”
said Mr. Todorov, referring to the Consent Decree signed between CADE and iFood after the platform was accused by Rappi of striking an exclusive dealing agreement with major restaurant chains. At the time, 99Food also argued that such practices hindered competition in Brazil.
Following an investigation, iFood and CADE reached a settlement in 2023 that set limits on exclusivity clauses in contracts with restaurant partners, including restrictions on contract length and the size of food chains.
A source close to 99’s operations said the company has never opposed exclusivity per se, but rather practices that undermine market competitiveness, especially when used by a dominant player. According to the source, the company is adopting legal strategies to “gain market and protect its space.”
A similar settlement was reached in 2022 in the fitness sector, when the antitrust regulator limited Gympass’s exclusive dealing agreement contracts with gyms to a cap of 20% of the network in a given city or zone, and tied them to meeting goals for increasing gym membership.
Now, iFood faces another case, this time brought by the Brazilian Association of Worker Benefit Companies (ABBT), which represents major players in the sector. The association alleges discrimination against rival operators on iFood’s digital platform and preferential treatment for its own meal-benefit product.
According to ABBT, iFood is leveraging its delivery monopoly in the meal-voucher market, using benefits financed by restaurants on its platform. ABBT also alleges that iFood has access to sensitive customer data, who are also clients of rival meal-voucher providers, such as socioeconomic profiles, order frequency, average spending, payment methods, and financial institutions.
In a statement, iFood said it accepts all major meal vouchers without discrimination and that it is in its interest to offer as many payment options as possible.
“ABBT’s attack aims to block the entry of more innovative companies, such as iFood Benefícios, which seek to grant better conditions to users and foster a more open, competitive, and efficient environment for the sector’s entire value chain.”
Source: Valor International
