A Competition Commission investigation has found that food delivery platforms Zomato and Swiggy engaged in unfair business practices, including alleged preferential treatment towards certain restaurant partners, according to sources.
The comprehensive investigation was ordered by the Competition Commission of India (CCI) in April 2022, and the probe report was submitted to the regulator earlier this year.
Under the rules, the report by the CCI's Director General has been shared with the parties involved, who will later be called for hearings by the regulator. After collecting all opinions and explanations, the CCI will issue a final order.
The decision to investigate the two platforms stemmed from a complaint by the National Restaurant Association of India (NRAI).
Sources indicated that the investigation revealed anti-competitive practices by the two entities, including alleged preferential treatment for certain restaurant partners. The report was submitted to the regulator earlier this year, they added.
A query sent via email to Swiggy went unanswered, while Zomato declined to comment.
The NRAI stated it had reviewed the redacted version of the investigation report provided to it in March 2024.
“To ensure the market’s interests are adequately safeguarded, we recently petitioned the High Court in November 2024, requesting CCI to grant full access to the report,” the association said in a statement.
NRAI President Sagar Daryani expressed hope that CCI would expedite its investigation into other issues raised in the NRAI's 2022 petition.
Last month, Swiggy referenced the CCI case in the Red Herring Prospectus for its Initial Public Offering (IPO). The IPO concluded on Friday.
In its April 2022 order initiating the investigation, CCI noted that "prima facie there exists a conflict of interest situation, warranting a detailed scrutiny into its impact on the overall competition between the RPs vis-à-vis the private brands/entities which the platforms may be incentivised to favour."
The April 2022 order further noted that preferential treatment provided to Restaurant Partners (RPs) where these platforms have an equity or revenue stake could create obstacles for other RPs to compete on fair terms.
"Such preferential treatment can manifest in various forms, given the platform’s control over different elements that affect competition, such as delivery control and search rankings, which can only be adequately assessed through an investigation," it said.
The watchdog also pointed out that the price parity clauses in the agreements of Zomato and Swiggy appeared to indicate broad restrictions that prevent RPs from offering lower prices or higher discounts on their own channels or on other aggregators, ensuring that the platform maintains minimum prices or maximum discounts.
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