NEW DELHI: An investigation by India’s anti-trust authority has revealed that food delivery giants Zomato and Swiggy, which is backed by SoftBank, have violated competition laws. According to reports, Competition Commission of India’s (CCI) documents indicate that their business practices have given preferential treatment to certain restaurant chains that are listed on their platforms.
Zomato has reportedly engaged in “exclusivity contracts” with its partners, offering them reduced commission rates in exchange for exclusive listings. Similarly, Swiggy has been found to guarantee business growth to specific restaurants on the condition that they list with its service.
These findings were detailed in non-public documents prepared by the CCI. The CCI probe unit highlighted that the exclusivity agreements between Swiggy, Zomato, and their restaurant partners hinder market competitiveness. These findings, reviewed by Reuters, indicate such arrangements restrict the potential for a more competitive market environment.
The CCI’s documents, which adhere to confidentiality regulations, were shared with Swiggy, Zomato, and the restaurant groups that filed complaints in March 2024. These findings had not been disclosed prior to this report. The probe into Swiggy and competitor, Zomato, was initiated in 2022 following a complaint from the National Restaurant Association of India. The complaint raised concerns about detrimental effects that the platforms’ anti-competitive practices were having on food outlets.