Meituan's (HKG:3690) food delivery arm, Keeta, faces an unfair competition lawsuit filed by Brazilian food delivery app iFood over alleged unfair competition, Reuters reported Wednesday.

Consulting firms allegedly approached iFood employees to obtain confidential business information in exchange for a "significant" amount, according to Reuters.

The Prosus-owned food delivery service identified a now ex-employee who received a proposal and met via video call while still with the company, leading to a police probe, the report said.

IFood petitioned a business court in Sao Paulo to compel Keeta to alter its business practices and pay the Prosus-owned food delivery arm 1 million reais plus additional compensation, the report said, citing court documents seen by the newswire.

Shares rose 1% during morning trading on Thursday.

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