TapsiFood vs. SnappFood: A Legal Challenge Against Digital Exclusivity in Iran’s Platform Economy

Over the past several years, Iran’s digital markets have witnessed the rapid expansion of platform-based services—from ride-hailing to online retail to food delivery. Among these, SnappFood has emerged as the undisputed market leader in online food ordering. But with this dominance has come increasing concern over the company’s market behavior—particularly its alleged use of exclusive contracts that limit fair competition and block rivals from scaling.

In late 2024, TapsiFood, a new entrant in the online food delivery space, filed a formal complaint with Iran’s Competition Council, accusing SnappFood of anti-competitive practices designed to entrench its monopoly and obstruct new players. The Council accepted the complaint, initiating formal proceedings and marking a significant moment in Iran’s competition enforcement efforts in digital markets.

This case is more than a business dispute—it is a critical test of Iran’s willingness and capacity to regulate dominant digital platforms. With support from Bana, the Center for Development and Competition Studies, TapsiFood is leveraging legal, economic, and institutional tools to challenge behavior that, if left unchecked, could lock the future of Iran’s digital economy into monopolistic patterns. This post outlines the legal foundations, strategic framing, and broader implications of the case.

From Growth to Gridlock: A New Entrant Hits a Wall

TapsiFood, launched as part of Tapsi’s broader mobility platform, entered the food delivery market with ambitions to diversify services, integrate local restaurants, and offer consumers more choice. As with any new platform, early-stage growth required partnerships with restaurants and sufficient visibility in urban centers.

However, as TapsiFood expanded into key regions, it encountered a recurring obstacle: a significant number of restaurants had already entered into exclusive or highly restrictive agreements with SnappFood. These contracts, in effect, barred them from listing their menus on any other platform—even when doing so would benefit their businesses. In some cases, refusal to comply reportedly came with consequences: reduced visibility, lower rankings, or threats of delisting.

This pattern presented a structural challenge. Rather than competing through innovation, price, or service quality, SnappFood appeared to be protecting its dominance through contractual lock-in—limiting restaurants’ autonomy and suppressing TapsiFood’s access to the market’s supply side.

Building the Legal Case: Economic Evidence and Regulatory Expertise

Recognizing the systemic nature of the problem, TapsiFood partnered with Bana, Iran’s leading institution for competition law and market analysis. Bana’s role was pivotal: not just to provide legal support, but to construct a strategic, data-driven complaint that could stand up to regulatory scrutiny.

Bana’s approach began with market definition—a crucial component in any competition law case. The relevant market, they argued, was not general food services or broader e-commerce, but digital food ordering platforms. Within this specific frame, SnappFood’s dominance was overwhelming. High user concentration, brand familiarity, and logistical integration made it nearly impossible for a newcomer to compete without equal access to restaurants.

The team then evaluated the content and structure of SnappFood’s contracts, focusing closely on the specific mechanisms used to enforce exclusivity. One common tactic involved conditional discounts, which were only granted to restaurants that refrained from listing their services on competing platforms. Another method was the use of preferential rankings, where restaurants that refused exclusivity were systematically ranked lower in search results, limiting their visibility to users. The contracts also included financial penalties for early termination, effectively deterring restaurants from exiting restrictive agreements. In some cases, the pressure was more implicit, with restaurants reporting verbal warnings or algorithmic downgrades when they attempted to collaborate with other platforms—creating a climate of uncertainty and dependency that reinforced SnappFood’s control over the market.

Importantly, Bana’s analysis didn’t just describe these terms—it quantified their effects. The complaint included impact assessments on restaurant revenue, market share simulations, and counterfactual modeling to show how the market would function if exclusivity were removed. The evidence showed that SnappFood’s practices not only harmed rival platforms but also reduced consumer choice and created dependency among restaurant owners.

Legal Foundations: Iranian and International Precedent

Bana’s complaint drew on both Iranian antitrust law and comparative international doctrine. Iran’s competition framework prohibits the abuse of dominant position and recognizes contracts that restrict market access as unlawful when they distort competition. But to bolster the argument, Bana also referenced cases from the EU, India, and Latin America—jurisdictions where similar digital market challenges have been litigated.

For instance, the EU’s cases against Amazon and Apple, and India’s regulatory interventions in food delivery, all highlight a common issue: how exclusive arrangements in two-sided markets (platforms that serve both users and suppliers) can quickly become exclusionary. These parallels helped position TapsiFood’s complaint not as an outlier, but as part of a global regulatory pattern—reinforcing the legitimacy of intervention in Iran.

Bana also addressed potential defenses in advance. If SnappFood were to argue that exclusivity was needed for service consistency or operational efficiency, the complaint included economic modeling to show that any short-term efficiencies were outweighed by long-term harm: reduced competition, higher prices, stagnant innovation, and weaker consumer responsiveness.

Regulatory Response: The Competition Council Takes Action

The Competition Council’s formal acceptance of the complaint was a turning point. It showed that Iran’s competition authorities are willing to tackle not only traditional monopolies but also new forms of digital exclusion—those enforced not by price controls or mergers, but by algorithms, contracts, and data.

Since then, TapsiFood and Bana have continued to engage the Council through updated filings, real-time data, and testimonies from affected restaurant owners. The case is now under active review, and its resolution could significantly shape the regulatory boundaries for Iran’s digital platforms.

Already, the Council’s openness to hear such a case signals progress. It implies recognition that platform-based dominance must be measured not only by market share but by access control, behavioral incentives, and the terms imposed on participants in the ecosystem.

Implications for the Market: Beyond This Case

Regardless of the final outcome, the TapsiFood vs. SnappFood case is altering the landscape of regulatory discourse in Iran. It is setting a template for how digital abuse of dominance should be documented, challenged, and addressed.

For other startups operating in Iran’s digital economy, this case offers a valuable roadmap. It shows the importance of building a case on a foundation of empirical data rather than relying solely on anecdotal evidence. Success depends not just on identifying harm, but on working with experts who can translate business realities into structured legal and economic arguments. Perhaps most critically, the case demonstrates that framing the harm in broader terms—extending beyond the complainant to include consumers, third-party businesses, and the competitive structure of the market itself—is essential to persuading regulators and triggering meaningful intervention.

For regulators, the case raises broader questions: How should competition tools be adapted for digital contexts? What metrics should define abuse in platform economies? And how can enforcement stay responsive to fast-moving market structures where exclusion doesn’t look like a monopoly but acts like one?

It also touches on broader policy concerns—interoperability, algorithmic transparency, and fair access—all of which are crucial if Iran is to maintain a healthy digital economy capable of supporting innovation from multiple directions, not just the largest incumbent.

Conclusion: Toward a Doctrine of Fair Platform Competition

The TapsiFood vs. SnappFood case is more than an isolated legal dispute. It is a doctrine-setting confrontation in Iran’s transition to a rules-based digital economy. It demonstrates that with expert analysis, structured argumentation, and regulatory will, even well-established digital giants can be challenged.

As Iran’s digital economy matures, the lessons of this case will resonate widely. TapsiFood, backed by Bana, has shown that platform monopolies are not unassailable—and that legal strategy can reshape the conditions of market access. Whether in food delivery, e-commerce, or fintech, the message is clear: dominance is not impunity.

As the Competition Council moves forward with the case, much will depend on its willingness to not only issue a fair ruling but to monitor compliance, enforce change, and protect digital openness. If it succeeds, this could be a defining moment for digital competition in Iran—a precedent that affirms that access, fairness, and contestability are non-negotiable principles in the platform era.