NEW DELHI: The anti-trust regulator, Competition Commission of India (CCI), has ordered an investigation into the alleged anti-competitive conduct of food delivery platforms Zomato and Swiggy.
The CII order came after the National Restaurant Association of India (NRAI) has made several allegations of anti-competitive practices by the two food delivery apps, which according to NRAI, control 95% of the food delivery market.
NRAI in its complaints with CCI alleged restaurant owners are forced to use delivery services of Zomato, Swiggy if they want to avail the listing services. The restaurant body claimed due to this kind of bundling, restaurants are severely affected because of non-availability of delivery partners and delay in delivery, which directly affects their business.
The restaurant body has also alleged that the food delivery platforms engage in the practice of data masking, where the restaurants receive no data or information about the end consumers to whom the food is delivered. It says that payments are being deducted for poor customer satisfaction without the restaurant even knowing the reasons for the same.
The food delivery platforms have also been alleged of listing their own cloud kitchen brands exclusively on their platform, similar to private labels, thereby creating an inherent conflict of interest in the platform’s role as an intermediary on one hand and as a participant on the other hand.
The restaurant body has also said that the commissions charged by Zomato and Swiggy from restaurants to the tune of 20% to 30%, which are extremely exorbitant and unviable. The two food delivery platforms argued in the CCI that some clauses are imposed keeping the interest users in mind.
‘Conduct of Zomato, Swiggy requires investigation’
The Commission says the allegations pertaining to delayed payment cycle, charging of exorbitant commission etc do not seem to have effect on competition, yet it said there exists a prima facie case with respect to some conduct of Zomato and Swiggy, which requires investigation