After the Competition Commission of India (CCI) on Tuesday, April 5, ordered a probe into alleged unfair business practices by food delivery platforms Swiggy and Zomato, the latter has claimed that the CCI has not prima facie found concerns with independent levying of commissions or alleged bundling of services, but the Commission will rather probe aspects such as price parity and preferential listings.
“We will continue to work closely with the Hon’ble Commission to assist them with their investigation and explain to the regulator why all of our practices are in compliance with competition laws and do not have any adverse effect on competition in India,” Zomato told stock exchanges, adding that it will comply with the CCI’s recommendations.
Following a complaint from the National Restaurant Association of India (NRAI), the CCI said that it is of the view that there exists a prima facie case with respect to 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 " of the Competition Act, 2002. The NRAI represents over 50,000 restaurant operators across the country. In its complaint filed in July 2021, the NRAI had sought an inquiry into alleged data masking, violations of platform neutrality and other charges against Zomato and Swiggy.
Reacting to the CCI’s order, the NRAI has said that it is “extremely happy” that the probe against the food delivery giants has been ordered. “It may be noted that the NRAI has been engaging with both the aggregators and the concerned Government authorities in the past few years to resolve existing pain points of the Industry vis-à-vis operations of the aggregators. These pain points were acutely amplified during the pandemic when Restaurants and Cloud Kitchens were struggling for survival by way of their increased dependence on these aggregators. In the absence of a sustainable solution, NRAI filed information with CCI on 1st July, 2021 highlighting the concerns and issues related to the functioning of food aggregator platforms which should ideally operate as a neutral marketplace,” the association said in a statement.