CCI News | Zomato | Swiggy: CCI orders probe of Zomato, Swiggy into alleged competition law violation

The CCI order comes after restaurant body National Restaurant Association of India (NRAI) moved CCI in July last year, with respect to anti-competitive practices by these food delivery companies.

The regulator said 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”.

Both Zomato and Swiggy operate as major intermediary platforms in the food delivery space, underscoring their market power and ability to adversely as well as appreciably affect the level playing field, the Competition Commission of India (CCI) said.

It also noted that preferential treatment accorded to the Restaurant Partners (RPs) in which these platforms have an equity or revenue interest can create barriers for the existing RPs to compete on fair terms.

“Such preferential treatment can be through various ways given the platform’s control over different aspects that influence competition on them, including control over deliveries, search ranking etc. which can only be examined appropriately in an investigation,” it said.

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The competition regulator has asked the director general to submit a report on the matter in 60 days.

“Given that Zomato and Swiggy are the two biggest platforms present in the food delivery segment, their respective agreements with RPs of this nature are likely to have an AAEC (Appreciable Adverse Effect on Competition)on the market by way of creating entry barriers for new platforms, without accruing any benefits to the consumers,” CCI said in a 32-page order.

PTI contributed to this story.