Colombian regulators order delivery app Rappi to comply with commerce laws

BOGOTA (Reuters) - Colombian regulators on Thursday ordered popular delivery app Rappi to comply with electronic commerce laws, saying the company is offering services that go beyond basic contact between clients and suppliers.

FILE PHOTO: The logo of Colombian on-demand delivery company Rappi is seen on delivery a bag in Mexico City, Mexico August 30, 2019. REUTERS/Henry Romero

The Superintendency of Industry and Commerce also said it was opening an investigation of the app - which specializes in on-demand deliveries for restaurants and supermarkets - after receiving hundreds of customer complaints.

Rappi allows clients to have everything from tobacco products to concert tickets delivered to their homes or offices, paying via the app or in cash.

Regulators said the app has moved beyond facilitating contact between clients and suppliers, becoming a “commercialization chain” subject to different regulations.

The regulators ordered the company to adjust the apps’ terms and conditions, saying some provisions - including asking clients to reject some rights and conditions that could prevent them from getting exact change for purchases - may violate Colombian laws.

The decision is not subject to appeal, the regulators added.

Rappi, founded in 2015 in Colombia, said in a statement it will comply with the regulator’s orders and implement the requested measures.

The regulators also opened an investigation for alleged infractions related to misleading advertising and electronic commerce. That investigation will look into hundreds of complaints by customers about charges that differed from those advertised, failure to fulfill special offers, charges for canceled orders and other problems.

“In the case that charges are proved, fines of 2,000 minimum legal salaries could be imposed,” the regulator said. A fine of that amount would be equivalent to nearly $500,000.

The app also operates in Brazil, Mexico, Argentina, Chile, Peru, Uruguay and Costa Rica.

Rappi’s co-founder told Reuters last week the company plans to almost double the number of cities it operates in by year’s end, following a $1 billion injection from Japan’s SoftBank that signals growing foreign interest in the region.

The deal in May made SoftBank a majority owner in the startup. The app is currently available in 55 cities.

Reporting by Nelson Bocanegra; Writing by Julia Symmes Cobb; Editing by Dan Grebler