Zomato rejected the claims made in recent media reports, alleging that the competition commission of India (CCI) has found the food delivery giant guilty of violating competition laws. In a statement released by the giant on November 10, the company said the antitrust body began a preliminary investigation in April 2022, however, no conclusive findings or orders have been issued against it.
“...Competition Commission of India had issued a prima facie order on April 4, 2022, which directed the office of the Director General of the Commission to investigate potential violations under the Competition Act, 2002... the Commission, on merits, has not passed any order,” said the company in a statement on the Bombay stock exchange (BSE).
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The documents of CCI stated by Reuters accused Zomato of indulging in practices that favoured some restaurant partners in different ways, including signing of “exclusivity contracts” with partners in exchange for low commissions. It also claimed that the platform imposed certain pricing and discount limitations on restaurants, like “penal provision” for non-compliance in certain conditions.
However, the company in the statement refuted all claims and said that it is closely working with the antitrust body to ensure its business practices don’t violate the competition laws of the country.
“We will continue to work closely with the commission to explain why all our practices are in compliance with the Competition Act and that they do not have any adverse effect on competition in India,” added the company.
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According to the reports, Zomato is not the only one accused of breaching competition laws; Swiggy too has been charged with similar business practices. The study revealed that CCI, in its investigation, found out that Swiggy has threatened partner restaurants that “their rankings will be pushed down if they do not maintain price parity”.
Swiggy has rejected the allegations as well in a statement on Monday. It added that the matter is still ongoing and no judgement regarding the violation has been passed by the antitrust body.
“Once Swiggy submits its response and CCI conducts a hearing on the matter, CCI will pass its decision on whether any competition law violations have occurred. Currently, it’s at a preliminary stage and no final decision or order has been issued regarding Swiggy’s practices since 2022,” said Swiggy in a statement reportedly. “Swiggy is fully cooperating with the investigation and is committed to complying with the laws of the country,” the company added.
The complaint against both the food delivery platforms was filed in April 2022 by the National Restaurant Association of India. Thereafter, the antitrust body initiated a probe. The report of CCI mentioned by Reuters is not in the public domain as of now.
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