CCI investigation against Swiggy-Zomato will provide level playing field to restaurants: NRAI
Apr 05, 2022
New Delhi [India], April 5 : The Competition Commission of India (CCI), a statutory body within the Ministry of Corporate Affairs, in its order dated April 4, 2022, has ordered an investigation against Zomato and Swiggy based on the information filed by the National Restaurant Association of India (NRAI) last year.
NRAI looks forward to a positive outcome of this investigation which will pave way towards providing a level playing field for all stakeholders in the ecosystem, said NRAI in a statement issued today.
The CCI has launched investigations into Zomato and Swiggy (Bundl Technologies Pvt Ltd) related to dealings with restaurant partners, neutrality, alleged unfair pricing, and other aspects.
According to the statement, NRAI is extremely happy to note that the Competition Commission of India (CCI) vide its order dated April 4, 2022 has ordered an investigation against Zomato and Swiggy based on the information filed by the NRAI last year. "We are very happy that the CCI saw merits in our submission which highlighted Restaurant Industry's concerns," it read.
It may be noted that the NRAI has been engaging with both the aggregators and the concerned Government authorities in the past few years to resolve existing pain points of the Industry vis-a-vis operations of the aggregators. These pain points were acutely amplified during the pandemic when Restaurants and Cloud Kitchens were struggling for survival by way of their increased dependence on these aggregators. In the absence of a sustainable solution, NRAI filed information with CCI on July 1, 2021 highlighting the concerns and issues related to the functioning of food aggregator platforms which should ideally operate as a neutral market place.
Zomato said that CCI has mentioned that prima facie, it has not found concerns on levy of commission or alleged bundling of services.
"The Commission has mentioned that it has prima facie not found concerns with respect to our independence on levy of commissions or alleged bundling of services, while it would want to investigate aspects such as preferential listing of restaurant partners and pricing parity across platforms, etc," Zomato said in a BSE filing.
"We will continue to work closely with the Commission to assist them with their investigation and explain to the regulator why all of our practices are in compliance with competition laws and do not have any adverse effect on competition in India. We intend to promptly comply with any recommendations given to us by the Commission," Zomato said further in a BSE filing.
The competition watchdog in its order on Monday said, "The Commission is of the view that prima facie a conflict of interest situation has arisen in the present case, both with regard to Swiggy as well as Zomato, because of the presence of commercial interest in the downstream market, which may come in the way of them acting as neutral platforms."
It also said it warrants "a detailed scrutiny into its impact on the overall competition between the RPs vis-a-vis the private brands/entities which the platforms may be incentivised to favour". The regulator's investigation arm, director-general, will submit its report within 60 days on the issue."
