Delivery app Rappi, Uber Eats win first round of antitrust dispute with Brazilian rival

FILE PHOTO: The logo of Uber Eats and the Colombian on-demand delivery company Rappi are seen in Mexico City, Mexico May 20, 2019. REUTERS/Carlos Jasso

SAO PAULO (Reuters) - Softbank-backed Latin American delivery app Rappi and Uber Eats on Thursday won the first round of a dispute against their main Brazilian rival at antitrust watchdog CADE.

In a statement on Thursday, CADE said it has forbidden delivery app iFood to sign new exclusivity deals with restaurants for delivery as a way to preserve competition.

CADE also forbade iFood to tweak current contracts, including exclusivity clauses, until its current antitrust investigation reached a decision.

The probe began after a complaint by Rappi last September, it said. Rappi alleges iFood restricts competition demanding exclusivity from restaurants, and creates high barriers of entry to new delivery companies.

The Brazilian association of restaurants and bars also complained to CADE about iFood saying circulation restrictions due to the pandemic made restaurants more dependent on delivery apps sales and created pressure on them to sign exclusivity deals.

Uber Eats, controlled by Uber Technologies Inc. seconded Rappi’s complaint to the antitrust watchdog.

Restrictions to the exclusivity deals are valid throughout the investigation, until CADE reaches a final decision on the matter, according to the statement.

Reporting by Tatiana Bautzer; editing by David Evans