CCI Orders Probe Into Zomato, Swiggy for Alleged Unfair Trade Practices

This comes after the National Restaurant Association of India alleged “anti-competitive” practices by the platforms.

The competition watchdog has directed its investigative arm to submit a report within 60 days.

(Photo: Altered by The Quint)

The Competition Commission of India (CCI) on Monday, 4 April, ordered a probe into the conduct of food-tech giants Zomato and Swiggy for allegedly unfair trade practices.

The development comes after the National Restaurant Association of India (NRAI) alleged “anti-competitive” practices by the platforms.

It complained that Zomato used consumer data to build cloud kitchens and selectively offered perks to certain brands for additional fees, in turn guaranteeing minimum revenues to such brands, The Indian Express reported.

The NRAI also alleged that Swiggy gained sales unfairly from private brands and diverted consumer traffic to such brands.

The competition watchdog has directed its investigative arm to submit a report within 60 days. The CCI said,

“…the Commission is of the view that prima facie a conflict of interest situation has arisen in the present case, both with regard to Swiggy as well as Zomato, because of the presence of commercial interest in the downstream market, which may come in the way of them acting as neutral platforms."

Claims ‘Do Not Seem To Have an Effect on Competition': CCI

However, in a setback to the NRAI, the CCI stated that the restaurant body’s allegations of restaurant listings and food delivery services do not seemingly have a direct impact on competition.

The CCI further said that high commissions charged by platforms to restaurant partners prima facie “do not seem to have an effect on competition in the facts and circumstances of the present case,” as per The Indian Express.

It recommended that online platforms should be transparent with data sharing and reduce information asymmetry between sellers and the platforms.

(With inputs from The Indian Express.)