India’s Food Delivery Giants Face Antitrust Allegations over Market Dominance

New Delhi, India — India’s leading food delivery platforms, Zomato and Swiggy, are under scrutiny following an investigation by the Competition Commission of India (CCI) that suggests these companies used unfair practices to favor selected restaurants, according to documents reviewed by TBS News. The investigation points to anti-competitive tactics that allegedly limit options for consumers and create obstacles for restaurant businesses across the platform.

The inquiry, initiated by the CCI in 2022, followed a complaint filed by the National Restaurant Association of India (NRAI), which argued that Zomato and Swiggy’s operations were disadvantaging many restaurant operators. According to the CCI’s findings, Zomato and Swiggy allegedly struck exclusivity deals that grant certain benefits to restaurant partners in exchange for platform loyalty. In Zomato’s case, the company reportedly signed “exclusivity contracts” that allow for lower commission fees for restaurants that agree to these terms. Meanwhile, Swiggy purportedly offered restaurants guaranteed business growth as an incentive to remain exclusively on its platform.

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In the findings, the CCI’s investigation arm emphasized that these exclusivity arrangements between the two delivery giants and their preferred restaurant partners hinder competitive dynamics in India’s food delivery market. “These practices prevent the market from becoming more competitive,” the commission noted, as reported by Reuters. The CCI’s findings underscore concerns that such arrangements could restrict consumer choice and reduce opportunities for smaller or independent restaurants to compete on a level playing field.

While the CCI documents are confidential under the commission’s confidentiality rules, they were shared with Zomato, Swiggy, and the NRAI in March 2024. This marks the first public disclosure of these findings, adding a new layer to the regulatory challenges facing India’s fast-growing food delivery sector.

Source: TBS News