NEW DELHI: A groundbreaking investigation by the Competition Commission of India (CCI) has found that food delivery giants Zomato and Swiggy engaged in anti-competitive practices, marking one of the first instances of a probe in this category for the food delivery sector.
According to sources, the CCI’s Director General’s report, submitted earlier this year, points to unfair business practices such as preferential treatment for select restaurant partners.
NRAI complaint
The investigation, initially launched by the CCI in April 2022 following a complaint from the National Restaurant Association of India (NRAI), revealed that both Zomato and Swiggy may have prioritised certain restaurant partners through methods like delivery controls and search ranking manipulations.
This, as per the CCI’s original order, creates a “conflict of interest” that could hinder fair competition, particularly for restaurant partners without a direct equity or revenue interest with the platforms.
CCI findings
The CCI’s findings also suggest the existence of restrictive price parity clauses within Zomato and Swiggy’s agreements, which prevent restaurant partners from offering lower prices or higher discounts on other platforms or their own channels, thereby limiting competitive pricing.
In response to the findings, the NRAI stated it had reviewed the redacted version of the report in March 2024 and has since petitioned the High Court for full access.
Meanwhile, Swiggy referenced the ongoing CCI case in its recent IPO Red Herring Prospectus, while Zomato declined to comment on the developments.
