November 08, 2024 22:24 (IST)
Follow us:
facebook-white sharing button
twitter-white sharing button
instagram-white sharing button
youtube-white sharing button
EC warns of stern action over derogatory comments against women after Shaina NC remark sparked row | Aligarh Muslim University is entitled to minority status, rules Supreme Court overruling 1967 judgement | Article 370 restoration demand triggers ruckus in Jammu and Kashmir Assembly again | Kashmir: Two village guards kidnapped and killed by terrorists in Kishtwar | Salman Khan gets fresh threat over a song naming Lawrence Bishnoi
Swiggy, Zomato flouted competition laws, CCI finds in probe: Report
The probe against Zomato and Swiggy began in 2022 after a complaint from the National Restaurant Association of India.

Swiggy, Zomato flouted competition laws, CCI finds in probe: Report

| @indiablooms | 08 Nov 2024, 07:36 pm

New Delhi: An investigation by India’s Competition Commission (CCI) found that major food delivery companies Zomato and SoftBank-backed Swiggy violated competition laws through practices that favoured specific restaurants on their platforms, according to confidential CCI documents.

The CCI's findings, reviewed by Reuters, reveal that Zomato entered “exclusivity contracts” with certain partners in exchange for reduced commission rates, while Swiggy assured business growth for restaurants that agreed to list exclusively on its platform.

The CCI’s investigative arm concluded that these exclusivity agreements “prevent the market from becoming more competitive.”

The antitrust inquiry into Zomato and Swiggy began in 2022 after a complaint from the National Restaurant Association of India, which alleged that the platforms' practices were negatively impacting food outlets.

These CCI documents, kept confidential by the commission’s rules, were shared with Zomato, Swiggy, and the complainant restaurant group in March 2024. This is the first time the findings have been publicly reported.

Following the Reuters report, Zomato’s shares dropped by 3% after initially remaining flat in earlier trading. Swiggy did not respond to requests for comment, while Zomato declined to comment.

Swiggy’s IPO prospectus identifies the ongoing CCI case as an “internal risk,” noting that “any breach of the provisions of Competition Act may attract substantial monetary penalties.”

Swiggy told the CCI that its “Swiggy Exclusive” program ended in 2023 but disclosed plans to launch a similar program, “Swiggy Grow,” in non-metro areas.

Both Swiggy and Zomato have transformed India’s food delivery landscape as smartphone and online ordering have surged, with hundreds of thousands of restaurants listed on their platforms.

Swiggy, which is concluding bids for its $1.4 billion IPO, India’s second-largest this year, has, along with Zomato, also pushed restaurants to maintain consistent pricing across platforms, the CCI documents noted, limiting competition by preventing restaurants from offering lower prices elsewhere.

The investigation also found that Zomato imposed pricing and discount restrictions on restaurant partners, in some cases applying penalties if these terms were not met.

Support Our Journalism

We cannot do without you.. your contribution supports unbiased journalism

IBNS is not driven by any ism- not wokeism, not racism, not skewed secularism, not hyper right-wing or left liberal ideals, nor by any hardline religious beliefs or hyper nationalism. We want to serve you good old objective news, as they are. We do not judge or preach. We let people decide for themselves. We only try to present factual and well-sourced news.

Support objective journalism for a small contribution.