The São Paulo Court of Justice (TJ/SP) found 99Food guilty of unfair competition in a lawsuit filed by Keeta, a delivery subsidiary of Chinese company Meituan. Judge Fabio Henrique Prado de Toledo, of the Third Business and Arbitration Court, decided compensation of R$100,000. There is still an appeal.
In the process, Keeta claims that when 99Food learned of its arrival in Brazil, it purchased the use of the name “Keeta” as a keyword in Google ads. Thus, when searching for the term on Google, the consumer is directed to 99Food sponsored ads, pushing Keeta’s links down.
The judge understood that purchasing ads linked to another brand or company’s name constitutes “parasitic exploitation of the attractive power of another brand,” especially when the ad appears prominently and is at the top of searches.
He stressed that the companies operate in the same sector and that 99Food had hired advertisements to link its websites to searches containing Keita’s name. It has also decided that 99Food will permanently suspend any advertisement or sponsored link that uses the term “Keeta” as a keyword, alone or in combination with other terms.
Kita asserts that this practice distracts consumers from its brand and creates confusion, leading to unfair competition. 99Food, in turn, believes that using a competitor’s name as a keyword does not constitute an infringement, as its ads do not explicitly mention Keeta and do not mislead the consumer.
99Food also notes that Keeta herself uses competitors’ keywords, such as “Rappi,” in ad campaigns, a practice it considers common in the sector. He also said that there was no overt use of the trademark in the advertisements, but only as an internal technical standard, invisible to the user, without causing error or confusion.
EXTRA awaits positioning from 99Food. When contacted, Kita said she is committed to building a business that creates jobs, increases profits for delivery drivers and restaurants, and provides more choices for consumers.
Another battle involving the two companies in court concerns exclusivity contracts. Keeta does not operate through exclusive contracts with restaurants, unlike the model 99Food used when it entered the Brazilian market in August.
Before commencing operations, Keeta went to court to question 99Food’s exclusivity terms, which allowed registered restaurants to continue doing business with iFood, but not through Keeta.
At an event this week in São Paulo (SP), Danilo Mansano, Keeta’s vice president in Brazil, said that exclusive agreements between restaurants and the platform pose a burden on establishments that have chosen to coordinate another contract.
99Food asserts that this practice is necessary to compete in a market dominated by a large operator, in this case, iFood. At the beginning of November, TJSP recognized the legality of contracts offered by the company.