The legal vice-president of Tapsi: Snapfood has made its position unshakable and limited its competitors with its exclusive procedure.
Negin Ansari, Legal Deputy of Tapsi, in an interview with Zomit, provided explanations about Tapsi’s lawsuit against Snapfood, which was registered in the Competition Council on November 1. Tapsi specifically objects to Snapfood’s exclusive practice, and Tapsi’s legal assistant states the reason for his complaint:
We specifically object to Snap’s exclusive contracts, all of which have three elements and create barriers for new competitors to enter the market and weaken existing competitors.
– Nagin Ansari, Tepsi’s legal assistant
According to Ansari, Snapfood group’s exclusive contracts have three points that create a monopoly: “One is that if a restaurant concludes an exclusive contract with Snapfood, a 1.5 point coefficient is registered for the restaurant’s performance, which is very effective in its sales. Another element is that if the restaurant or store works exclusively with Snap, it receives a 15-40% discount in commission. The third point in these contracts is that if the restaurant wants to withdraw from this exclusive contract and work with Snapfood’s competitors, it must pay the equivalent of this discount applied during the duration of the contract as a penalty.
This story is old and familiar
These three elements together is the issue that Tepsi objects to. Of course, a few days ago, the Zodex platform, which operates in the field of online food ordering, also sued Snapfood for the same reasons and asked the Competition Council to deal with Snapfood’s monopolistic practice, especially in concluding exclusive contracts with restaurants.
The story of online food ordering businesses complaining about Snapfood has a long history. Previously, platforms such as Chillivari protested Snapfood’s contracts and, by the way, had moved the case in their favor, but Snap’s way of working continued; Because with the liquidation of Chilivari, the complaint case of this business against Snapfood was practically closed.
Legal vice-president Tepsy does not consider this practice limited to Snapfood and believes that there are contracts in all Snap subsidiaries in all areas that fuel monopolies:
Since 1995, Snap’s exclusive behavior has been complained about in contracts or plans or talked about in the media. Chiliveri spoke about this Snapfood procedure a few years ago, Lando also protested against this exclusive procedure in the field of loans and payments, we protested in Tepsi in the field of internet taxi, and once protested in the field of Elopik Courier. Therefore, multiple businesses are complaining in all areas where Snap operates, and Snap must be held accountable.
– Nagin Ansari, Tepsi’s legal assistant
Ansari considers this monopoly practice to be current in the entire Snap group, which in their contracts “block the suppliers so that competitors cannot enter the market. As a result of numerous lawsuits that have been filed against Snap group subsidiaries in various fields since 2016, it is clear to everyone that this monopoly issue is not just a competition between two competitors; Rather, the issue is related to Snap Group’s procedure.”
About Ezkivam’s complaint:
Recently, Ezkiwam, as an active business in the field of loans and payments, also sued its competitor, SnapPay, because of the type of contracts. Referring to all these complaints and objections, Tepsi’s legal deputy says: “Until these procedures are dealt with decisively and completely, this process will continue. Therefore, we have to stop it so that a healthy competition is formed in all fields.”
We must hold Snapfood accountable for its exclusive practice
Ansari believes that Snap and its subsidiary companies have not had this response until today and have always shown themselves as victims when competitors attack them:
Snap’s position is always that “competitors attack me because they can’t compete with me”, but the point is that Snap is not competing, it is anti-competitive. The main question is, what has Snap done that such a wave has been launched by various businesses against the group? The largest number of complaints from competitors are always related to Snap, and these complaints are related to Snap’s own behavior.
– Nagin Ansari, Tepsi’s legal assistant
“Why did Snapfood still sign an exclusive contract when Chillivari was removed from the market?” asked Tepsi’s legal assistant. And his supposed answer to this question is Snap’s intention to prevent other competitors from entering the market. He further adds: “In the world, an actor who is a dominant actor, if he performs certain behaviors, his behavior is considered anti-competitive and will be dealt with. Even now, Snape is the dominant actor who should be held accountable.”
Ansari: We have presented very strong documents in our complaint
According to Ansari, Tapsi is trying to hold Snapfood accountable for such practices with his recent lawsuit. He also explains that he has “very strong documents” in his recent complaint, and Legal Deputy Tapsi hopes that “the Competition Council will use its powers to declare the competition contracts invalid so that competition can return to this market and businesses can operate in a normal market and to start competing without hindrance.”
The legal deputy of Tapsi says that there are enough laws in the field of competition that if they are implemented, they will have good capacities for deterrence, and he continues: “Of course, we can add heavy fines against anti-competitive practices like usual procedures in the world.”
Snapfood’s dominant position has made people not even know the names of its competitors
Negin Ansari, explaining Snapfood’s market share, says that this group is the exclusive player in 144 cities of Iran and has no competitors. According to him, Snapfood has a clear dominant position in the remaining 16 important cities: “This dominant position is so clear that users are unlikely to know or have heard of Snapfood’s competitors.”
The legal vice-president of Tapsi says that Snapfood’s practice is to go to big brands and well-known restaurants and attract these restaurants by signing an exclusive contract with them:
Snapfood has chosen special contracts for level one restaurants; This means that both fines and discounts are heavier for these restaurants and it gives them more points to sign an exclusive contract with Snap; Because he knows that the platform that has the first 50 restaurants, other competitors will not have a chance to compete with it.
– Nagin Ansari, Tepsi’s legal assistant
According to him, having big brands and first-level restaurants, whose one-day sales may be equal to the sales of a hundred small restaurants, will make users attracted to such a platform and not use other platforms. Snapfood’s current market share has been gained through these practices and has “given it an unshakable position and limited competitors,” said legal VP Tapsey. But restricting competitors in the market is against competition rules.
