New Delhi: A day after the Competition Commission of India (CCI) ordered a probe into online food aggregators Zomato and Swiggy’s conduct on pricing and listing of restaurants, Zomato said it will continue to work closely with CCI to assist them with their investigation.
In a regulatory filing, the company said, “We will continue to work closely with the Hon'ble Commission to assist them with their investigation and explain to the regulator why all of our practices are in compliance with competition laws and do not have any adverse effect on competition in India.”
The company also said it will explain to the CCI why all of its practices are in compliance with competition laws do not have any adverse effect on competition in India.
According to news reports, restaurant body National Restaurant Association of India (NRAI) welcomed this probe and said they are very happy that the CCI “saw merits in our submission which highlighted restaurant industry’s concerns”. The body has said that it has been engaging with both the aggregators and the government authorities in the past few years to resolve existing pain points of the industry.
The CCI on Monday ordered a probe into allegations of anti-competitive practices against food delivery companies Zomato and Bundl Technologies, which runs the Swiggy app.
“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 would conduct a thorough probe into the allegations and submit a report within 60 days, the CCI said.
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 had 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.”
It 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.