An investigation by India’s antitrust body, the Competition Commission of India (CCI), has uncovered anti-competitive behaviors by Zomato and Swiggy, India’s largest food delivery platforms. The inquiry, initiated in response to complaints by the National Restaurant Association of India in 2022, reveals that both companies struck exclusivity agreements with select restaurants, creating an unfair advantage and limiting competition.
Anti-Competitive Practices by Zomato and Swiggy
According to the CCI’s findings:
- Zomato’s Approach: Zomato allegedly offered reduced commission rates to restaurants that agreed to be exclusive to its platform.
- Swiggy’s Tactic: Swiggy, on the other hand, promised enhanced business growth to restaurants that listed exclusively on its app.
These practices, as per the CCI’s investigation, discourage a competitive environment and favor certain partners over others, potentially stifling growth and market opportunities for non-exclusive restaurants.
Final Decision Pending from CCI
After releasing its findings confidentially to Zomato, Swiggy, and the complainants in March 2024, the CCI has entered the final phase of the case. With a potential impact on India’s food delivery market, the CCI’s upcoming decision will clarify whether regulatory action will be imposed to ensure fair competition across food delivery platforms.
Implications for the Food Delivery Market
The CCI’s decision could shape future practices and policies in India’s food delivery ecosystem, ensuring that all restaurants, regardless of exclusivity, have fair access to growth opportunities on major platforms. This case highlights the growing importance of maintaining fair competition as the digital marketplace in India expands.
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