Brazilian Restaurant Association Files Antitrust Complaint Against iFood
Abrasel has filed an antitrust complaint against iFood, alleging anti-competitive practices threatening restaurant survival.
- • Abrasel files an antitrust action against iFood for anti-competitive practices.
- • iFood is accused of imposing excessive fees and restrictions on partner restaurants.
- • The complaint highlights iFood's dominance in logistics and market share.
- • Concerns include iFood's expansion into restaurant operations beyond delivery.
Key details
On September 29, the Brazilian Association of Bars and Restaurants (Abrasel) initiated an antitrust complaint against the popular food delivery service iFood, accusing it of engaging in anti-competitive practices that threaten the survival of restaurants in the competitive food delivery market. The complaint, filed with the Administrative Council for Economic Defense (Cade), alleges that iFood has evolved from a mere delivery service into a 'closed digital ecosystem' that leverages its significant market share of 80% to impose restrictive conditions on partner restaurants.
Abrasel claims that iFood mandates its partnering establishments to utilize its proprietary payment system, which charges fees as high as 3.5%. This figure notably exceeds the national average of 2.28%, as reported by Brazil's Central Bank. Additionally, the complaint highlights iFood’s logistical dominance, suggesting that the platform preferentially directs deliveries to its exclusive partners using advanced artificial intelligence, effectively creating barriers for new entrants in the market. The president of Abrasel, Paulo Solmucci Jr., emphasized that the issue is not merely about commercial disputes regarding fees but represents a critical situation affecting the freedom and sustainability of Brazilian restaurants.
Concerns raised by Abrasel also include the operational restrictions imposed by iFood. The group's complaint mentions the complex application programming interfaces (APIs) that make it difficult for restaurants to integrate with alternative systems, thus increasing their dependency on iFood's ecosystem. Moreover, the complaint criticizes iFood’s expansion efforts, particularly through initiatives like 'iFood Salão,' which allows the company to gather data on in-restaurant services and exert control over the operational aspects of partner restaurants, further entrenching its market power.
As of now, the antitrust complaint is being reviewed by Cade, which will determine the appropriate course of action regarding these allegations. Abrasel’s actions signal a significant push against what they view as monopolistic practices by one of Brazil's leading players in the food delivery sector, potentially setting a precedent for competition policies in the industry.