Anti-Competitive Clauses Must Be Removed from SnappFood Contracts, Rules NICC

National Competition Center of Iran (NICC) reviewed a complaint filed by Tapsi and Zoodex against SnappFood and, by a majority vote, determined that the company's exclusive contracts with restaurants constituted anti-competitive practices.

According to the ruling, SnappFood is now required to remove anti-competitive clauses—including restrictions on restaurants collaborating with competitors and penalties for contract termination—from all its agreements.

NICC found that while SnappFood did not use explicitly coercive language in its contracts, the cumulative terms and conditions effectively prevented partner restaurants from easily working with competitors. Additionally, restaurants faced financial penalties for exiting contracts.

NICC also deemed these practices an abuse of SnappFood’s dominant economic position in the online food delivery market, creating barriers for competitors and restricting market competition. The ruling also addressed complaints regarding SnappFood’s alleged 1.5x performance score multiplier for partner restaurants and the operations of SnappKitchen, though these aspects were not found to be in violation.

Tapsi and Zoodex’s complaint against SnappFood dates back to the fall of 2023 (1403 in the Persian calendar). The case has now been resolved after approximately six months.

SnappFood stated that some of the allegations against it were dismissed in the recent NICC session held on Tuesday, May 6. The company has submitted a request for reconsideration regarding its investment contracts with restaurants to the relevant authorities. "Naturally, the initial ruling is not enforceable until the appeals process is completed, and the decision may still change," the company noted.

SnappFood emphasized its significant investment of over 6 trillion tomans in services such as financing, subsidizing discounts, and covering marketing costs for fewer than 3,000 restaurants out of more than 30,000 active on its platform (and over 200,000 nationwide). The company argued that these efforts have played a crucial role in supporting small and medium-sized restaurants in competing with larger establishments.

"We hope the final ruling in the appeals process will balance competitive regulations with the need to encourage investment and innovation in the food industry," SnappFood added.