Conduct Of Zomato, Swiggy Needs Investigation, Says CCI; Report In 60 Days

The National Restaurant Association of India had approached the CCI in July 2021 seeking a probe against data masking, deep discounting, and violation of platform neutrality against Zomato and Swiggy

NRAI alleged that the commissions which are charged by Zomato and Swiggy from restaurants are to the tune of 20 per cent to 30 per cent, which are extremely exorbitant. Image: Getty

New Delhi: The Competition Commission of India (CCI) has ordered an investigation in to the conduct of online food aggregators, Swiggy and Zomato, according to news reports.

The fair trade regulator has mentioned that the conduct of the food delivery platforms, which is facing allegations such as delayed payment cycle, imposition of one-sided clauses, and exorbitant commission, requires a probe, according to an order dated April 4 (Monday).

According to the reports, prima facie there exists a case in regard to the conduct of Zomato and Swiggy.

“The Commission is of the view that there exists a prima facie case with respect to some of the conduct of Zomato and Swiggy, which requires an investigation by the Director General (DG), to determine whether the conduct of platforms have resulted in contravention of the provisions," the CCI order noted. The DG will conduct a thorough investigation into the allegations and submit a report within 60 days, the CCI said.

The National Restaurant Association of India (NRAI) has levelled charges against Zomato and Swiggy. The restaurant body had approached the CCI in July 2021 seeking a probe against the two food delivery giants.

The association, which represents over 50,000 restaurants spread across India, had urged the CCI to probe the charges of data masking, deep discounting, and violation of platform neutrality against Zomato and Swiggy.

NRAI alleged, “During the pandemic, the magnitude of anti-competitive practices of Zomato and Swiggy have increased manifold and despite numerous discussions with them, these deep funded marketplace platforms are not interested in alleviating concerns of the restaurants.”

NRAI further said that the commissions which are charged by the food delivery platforms from restaurants are 'unviable' and 'are to the tune of 20 per cent to 30 per cent, which are extremely exorbitant'.

Zomato was accused of charging nearly 27.8 per cent of the order value to the restaurants listed on its platform, and for Cloud kitchen, Zomato charged commission rate of 37 per cent, NRAI added.