The Competition Commission of India (CCI) has found that food delivery giants Swiggy and Zomato may be breaking India’s competition laws. According to non-public documents reported by Reuters, CCI says both companies’ business practices give unfair advantages to certain restaurants over others.
The CCI claims that Zomato has “exclusivity contracts” with some restaurants, which means these restaurants agree to list only on Zomato in exchange for lower commission rates. On the other hand, Swiggy reportedly promised faster business growth to restaurants that only partner with them. Such deals make it harder for other restaurants to compete, according to CCI’s findings.
The investigation into Swiggy and Zomato began in 2022, after a complaint from the National Restaurant Association of India (NRAI). The NRAI argued that such exclusive partnerships hurt small restaurants by limiting their reach and market potential. Confidential CCI reports about these findings were sent to both Swiggy and Zomato in early 2024.
Swiggy reportedly told CCI that it ended its “Swiggy Exclusive” program in 2023 but plans to introduce a similar “Swiggy Grow” program for smaller cities. Some restaurant partners also said Swiggy pressured them to keep prices the same across all platforms or risk losing ranking on the app.
Zomato, meanwhile, allegedly enforces strict pricing and discount rules on some partners and even has penalties if restaurants don’t comply. Both companies are still reviewing the CCI’s findings and have the option to challenge the investigation results.
As of now, the CCI’s final decision is expected in a few weeks, and Swiggy has acknowledged this investigation as a risk in its IPO filing, warning that breaking the Competition Act could lead to large fines.
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