Cade increases pressure on iFood with investigation into food stamps

CADE (Administrative Council for Economic Defense) increased the pressure on iFood by opening a new investigation front against the company. Now, there are two ongoing investigations, in which the antitrust authority investigates whether the company abuses its dominant position in the food delivery market to close the sector to competitors.

The municipality has already adopted preventive measures against the company in March last year and does not rule out doing so again in the new investigation. These measures are adopted by CADE when it deems it necessary to stop the anti-competitive practice before the conclusion of the process.

The most recent investigation, opened on March 14 at the request of ABBT (Associação Brasileira das Empresas de Vantagens ao Trabalhador), tries to determine whether the company violated competition laws by favoring its own food stamp card, the iFood Benefits, over of other companies operating in this market.

To do so, it would be abusing its dominant position in food deliveries, a related sector, through cross-subsidies, and making it difficult to use other cards on its platform.

The most advanced case was opened in 2020 at the request of Rappi and Abrasel (Brazilian Association of Bars and Restaurants). In it, the problem would be in the exclusivity clauses signed between iFood and commercial establishments. Cade has already ordered iFood to temporarily stop the practice in new contracts.

In both surveys, the problem lies in the near-monopolistic position in the iFood food delivery market, which can exceed 80% of the sector according to competitors. The situation worsened with the exit of Uber Eats from the market, as it occupied the second place in the segment.

“Uber Eats, a global company that invested millions in Brazil, came to the conclusion of giving up on the country because it was impossible to compete. Having great leadership passes, the problem is using that to skin [a concorrência]”, evaluated the chairman of the ABBT board.

iFood rejects the accusations. The company’s legal director, Lucas Pittioni, says that the signature of exclusive contracts with restaurants serves to protect investments made by the company in the establishment.

“A restaurant needs resources to modernize the kitchen, iFood decides to help, signs a contract in a short rule, of 12 months or a little more, so that during this period we can have a return on the investment made. contributed to this investment could it benefit right away?”, he exemplifies.

Regarding the process involving benefit cards, Pittioni questions the power that iFood has and the benefit it would have by excluding competitors from its platform. “We have about 1% of that market,” he says, while 90% would be held by ABBT members.

“There is no interest in restricting the user’s means of payment. iFood is interested in increasing business volume, and the more payment methods it accepts, the more orders it receives and the more iFood grows”, he defended.