The Court of the Administrative Council for Economic Defense (Cade) celebrated, in the trial session this Wednesday (8), Term of Cessation Commitment (TCC) with the iFood application.
The agreement seeks to stimulate competition after investigations by the agency point to indications that the platform is “abusing its dominant position” in the national market of food delivery marketplaces.
The TCC signed, effective for 54 months, has clauses that prevent or limit the requirement of exclusivity. For Cade, “practices like this would be raising barriers to the entry of new competitors in the market and would have exclusionary effects”.
The agreement prohibits the establishment of an exclusivity commitment with networks that add up to 30 restaurants or more.
The agency argues that the measure is justified because these chains are considered strategic in the composition of the portfolio of online food delivery marketplaces.
For brands with less than 30 restaurants, the term establishes maximum limits, with national and local references.
At a national level, iFood’s turnover linked to exclusivity commitments, in terms of Gross Merchandise Volume (GMV), cannot exceed 25% of the total registered by the platform.
At the local level, considering municipalities with more than 500,000 inhabitants, the number of exclusive restaurants cannot exceed 8% of the total.
In addition, they will last for a maximum of two years, followed by an “exclusivity quarantine”.
This means that, during the period of one year immediately after the end of the contract, the partner must remain without any commitment to exclusivity with iFood.
The exception to this measure is valid for a maximum of 50% of contracts with an exclusivity agreement and is subject to a performance target.
In this case, during the term of the commitment, iFood’s investments in the partner’s operation must generate an increase in revenue received through the platform that is at least 40% higher than the growth of the food delivery market in the immediately previous year.
In a note, iFood stated that the agreement recognizes the dynamism of the food delivery sector, the legality of the practice of exclusivity, and its importance for the viability of investments by platforms in restaurants.
“We will work to adapt our business model to the new rules imposed by the agreement – which have a relevant impact on our business -, aware that they bring more clarity and legal certainty to the entire sector”, added the platform.
Among other obligations, the TCC also prohibits the adoption of price parity clauses in relation to other marketplaces.
It also prohibits the conclusion of contracts that prevent restaurants from contracting other platforms after the end of the exclusivity commitment; linking incentives and/or discounts eventually granted to partners registered on the iFood platform to a commitment, on the part of the restaurant, to maintain most of its delivery business volume on the iFood application; and establishing volume discounts tailored to a specific partner on an individual basis.
Source: CNN Brasil
I am an experienced journalist, writer, and editor with a passion for finance and business news. I have been working in the journalism field for over 6 years, covering a variety of topics from finance to technology. As an author at World Stock Market, I specialize in finance business-related topics.
