Zoodex vs. SnappFood: Fighting for Fair Competition in Iran’s Digital Food Delivery Market

Over the past decade, Iran’s digital economy has seen the rise of dominant tech platforms across sectors from ride-hailing to food delivery. Among these, SnappFood has become synonymous with online food ordering in the country. But behind this market dominance lies a set of allegedly anti-competitive practices that have triggered scrutiny from regulators—and sparked formal complaints from rivals like Zoodex.

The dispute between Zoodex and SnappFood is now widely seen as a landmark case in the application of competition law to Iran’s fast-evolving digital markets. The case was submitted to the Competition Council (Shoraye Reghabat) with comprehensive documentation, economic analysis, and legal argumentation. It eventually led to a ruling against SnappFood, setting a precedent for future competition enforcement in digital platforms.

A Regional Challenger Meets a Wall

Zoodex began operations in 2019 in Kerman province as a local online food delivery service. Like many startups in Iran’s tech scene, it aimed to grow by offering competitive services and expanding into neighboring regions. However, Zoodex soon found its ambitions blocked—not by the market’s natural barriers, but by contractual ones imposed by SnappFood.

According to Zoodex, SnappFood had signed exclusive agreements with a large number of restaurants in key markets. These agreements prohibited restaurants from partnering with other platforms, effectively locking them into SnappFood’s ecosystem. For a smaller player like Zoodex, this meant access to a significant portion of the supply side (restaurants) was cut off—preventing it from offering a competitive range of choices to consumers.

This tactic, Zoodex argued, amounted to an abuse of dominance. In a market where SnappFood already enjoyed significant name recognition and user base advantages, these exclusivity clauses further entrenched its position and eliminated opportunities for new entrants.

Building the Case: A Data-Driven Strategy

What distinguished this complaint from many others in Iran’s tech ecosystem was its strategic preparation. Zoodex did not merely file a grievance—it built a robust case in collaboration with Bana, the Center for Development and Competition Studies. Bana is the first professional organization in Iran specializing in legal-economic consulting in competition matters. With expertise in both economic modeling and legal frameworks, Bana helped Zoodex construct a complaint rooted in quantitative analysis and regulatory logic.

The team at Bana conducted fieldwork and data collection. They analyzed the online food market’s structure, assessed the nature and effects of SnappFood’s contracts, and calculated the tangible costs these exclusivities imposed on restaurants. They also modeled counterfactual scenarios: what would market dynamics look like if restaurants were allowed to partner with multiple platforms?

Their findings painted a clear picture. Not only were Zoodex and other smaller platforms being excluded, but restaurants were also bearing the brunt of a monopolistic arrangement. The restrictions placed on them prevented access to broader demand channels, limiting their potential revenue and bargaining power.

Defining the Market and Establishing Dominance

A central part of Bana’s strategy was the definition of the relevant market—an essential step in competition law cases. They argued that the relevant market should not be the broader food service or logistics sector, but specifically the digital food ordering platforms. Within this narrower scope, SnappFood’s market share was overwhelming.

By focusing on this definition, the complaint was able to highlight how exclusivity agreements were not just inconvenient—they were anti-competitive in a legally meaningful sense. Zoodex was not merely losing to a more efficient rival; it was being structurally excluded from the market.

To support this claim, Bana presented evidence of market concentration, customer lock-in effects, and high switching costs. These elements combined to show that SnappFood’s behavior was not compatible with a healthy, open market. Instead, it created a “closed loop” in which restaurants and consumers had few viable alternatives.

The Legal Battle: Turning Data into Action

Armed with a strong body of evidence and a crafted legal argument, Zoodex submitted its complaint to Iran’s Competition Council. The Council, tasked with ensuring market fairness and preventing monopolistic behavior, serves as the regulatory body for overseeing anti-competitive conduct across sectors—including emerging digital markets.

What made this case compelling was the way Zoodex and Bana translated complex market realities into a structured legal claim. The complaint laid out a narrative: SnappFood’s exclusive contracts with restaurants were not standard commercial practice—they were designed to block rivals from entering the market, and they had measurable negative effects on competition, restaurant autonomy, and consumer choice.

Bana played a critical role in preparing the analytical framework and addressing potential counterarguments. For instance, if SnappFood were to argue that exclusivity led to better service quality or price reductions, Bana’s analysis was ready to show that these benefits, even if they existed, did not outweigh the broader harm to market dynamics. Their modeling demonstrated that long-term innovation and service quality were more likely to decline under monopolistic structures, where the leading platform faces little incentive to improve.

Beyond the economic arguments, the complaint included testimonies from restaurant owners who had been pressured—explicitly or implicitly—into signing exclusive contracts. Some were reportedly threatened with delisting or reduced visibility on the platform if they collaborated with other services. This added a human element to the economic analysis: the cost of exclusion was not just a theoretical loss in efficiency—it was a restriction on the livelihoods of small businesses.

The Ruling: A Win for Competitive Integrity

After reviewing the case, the Competition Council ruled in favor of Zoodex. The ruling acknowledged that SnappFood’s contractual practices constituted anti-competitive behavior, especially in light of its dominant position in the market. The Council ordered SnappFood to discontinue the use of exclusive agreements that prevented restaurants from working with rival platforms.

This ruling marks one of the first and few instances in which the Council has addressed digital platform behavior with such specificity. It not only curbs the dominant player’s contractual power but also opens the door for other platforms—especially regional players like Zoodex—to enter and compete on more equal footing.

Moreover, the Council’s decision reflects a growing awareness of how traditional tools of competition law need to be adapted for digital markets. In these environments, network effects, platform lock-in, and data asymmetries can quickly lead to winner-takes-all dynamics. By stepping in, the Council signaled that dominant digital platforms are not beyond regulatory oversight, especially when their conduct harms market access and innovation.

Strategic Litigation in the Digital Economy

What makes the Zoodex vs. SnappFood case noteworthy is that it represents a new kind of regulatory activism in Iran’s digital economy—one that blends legal advocacy, economic analysis, and data-driven strategy.

Bana’s involvement illustrates how effective competition enforcement requires more than legal expertise. It demands a multidisciplinary approach that includes market definition, quantitative impact assessment, and scenario modeling. In many ways, this case sets a template for how smaller players can challenge digital incumbents—not by appealing to fairness in the abstract, but by showing how anti-competitive conduct distorts real markets and harms real participants.

It also shows the importance of regulatory bodies adapting to the structural realities of platform economies. Exclusivity in digital markets does not operate the same way as in traditional industries; it can scale rapidly and reinforce itself through algorithms, network effects, and feedback loops. That the Competition Council was able to understand and act upon this reality is a promising development for Iran’s broader digital governance landscape.

What Comes Next?

While the ruling against SnappFood is a milestone, it is unlikely to be the end of the story. Enforcement will be key. Platforms may attempt to reintroduce exclusivity in subtler forms—through pricing incentives, preferential treatment, or algorithmic downgrading. Monitoring these behaviors and ensuring that platforms comply not only with the letter but the spirit of competition rulings will be essential.

For Zoodex, the ruling is both a legal victory and a strategic opening. With fewer artificial barriers, the company can now expand into new regions and compete on the basis of service quality, local knowledge, and innovation. Whether this results in genuine competition will depend on sustained oversight, the development of interoperable systems, and continued commitment by regulators to address anti-competitive behavior in all its forms.

For other startups and regional challengers, the case offers a roadmap: documentation, collaboration with technical experts, and a clear strategy can lead smaller players to reshape market rules.

Conclusion: A Turning Point for Digital Competition in Iran

The Zoodex vs. SnappFood case stands as a rare example of how informed, strategic legal action can challenge entrenched digital monopolies—even in difficult regulatory environments. By combining local entrepreneurship with expert economic and legal analysis, Zoodex and Bana not only secured a ruling in their favor but also helped shape the future of fair competition in Iran’s online platforms. As digital markets continue to grow, this case will likely serve as both a warning to dominant players and a source of hope for emerging innovators: monopolistic power is not invincible, and competition—when protected—can still thrive.