CCI Orders Probe Into Practices Of Zomato, Swiggy

The National Restaurant Association of India (NRAI), which represents over 50,000 restaurant operators across India, filed a complaint against the two companies, based on which the order was issued.
CCI Orders Probe Into Practices Of Zomato, Swiggy
The CCI ordered an inquiry on Zomato and Swiggy

The Competition Commission of India (CCI) on Monday ordered an investigation into the conduct of food delivery companies Swiggy and Zomato for allegations including delayed payment cycle, imposition of one-sided clauses and exorbitant commission.

The regulator for fair trade has asked its director general to conduct a detailed inquiry and submit a report within 60 days.

The CCI observed, “The Commission is of the view that there exists a prima facie case with respect to some of the conduct of Zomato and Swiggy, which requires an investigation by the director general (DG), to determine whether the conduct of platforms have resulted in contravention of the provisions.”

The National Restaurant Association of India (NRAI), which represents over 50,000 restaurant operators across India, filed a complaint against the two companies, based on which the order was issued.

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In July last year, the NRAI had approached the body for a probe into the allegations of data masking, deep discounting and violation of platform neutrality against Zomato and Swiggy.

It said, “During the pandemic, the magnitude of anti-competitive practices of Zomato and Swiggy have increased manifold and despite numerous discussions with them, these deep funded marketplace platforms are not interested in alleviating concerns of the restaurants

The nodal restaurant body alleged that the commissions that are charged from the restaurants are “unviable” and “are to the tune of 20 percent to 30 percent, which are extremely exorbitant”.

It accused Zomato of charging near to 27.8 per cent of the order value from the restaurants listed on its platforms. For cloud kitchens, the rate was as high as 37 per cent, it added.

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