New Delhi: In a significant development in the Indian food delivery market, the Competition Commission of India (CCI) has imposed penalties on Zomato and Swiggy for engaging in anti-competitive practices. The CCI investigation found that both companies had entered into exclusivity agreements with certain restaurant partners, limiting their ability to list on competing platforms.
The CCI’s investigation was initiated in 2022 following a complaint filed by the National Restaurant Association of India (NRAI). The NRAI had alleged that Zomato and Swiggy were using their dominant market position to dictate terms to restaurants, including high commission rates and exclusive tie-ups.
The CCI’s order revealed that Zomato and Swiggy had engaged in a variety of anti-competitive practices, including:
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- Exclusivity Agreements: Both companies had entered into exclusive agreements with certain restaurant partners, preventing them from listing on competing platforms.
- Price Discrimination: Zomato and Swiggy had discriminated against certain restaurant partners by charging them higher commission rates or imposing stricter terms and conditions.
- Denial of Market Access: Both companies had denied market access to certain restaurant partners, particularly smaller and independent restaurants.
The CCI’s order has far-reaching implications for the Indian food delivery market. It is expected to lead to increased competition and lower prices for consumers. It may also encourage the entry of new players into the market.
Zomato and Swiggy have responded to the CCI’s order, stating that they will comply with the regulator’s directives. They have also pledged to review their business practices and ensure that they are in compliance with competition laws.
The CCI’s order is a significant victory for consumers and small businesses. It sends a strong message to dominant companies that they cannot abuse their market power to harm consumers and competitors.
