Zomato, Swiggy involved in unfair biz practices, what it means for customers?
The Competition Commission of India (CCI) has ordered an investigation of food delivery companies Zomato Ltd and Swiggy over the companies’ apps being “neutral” platforms, the antitrust watchdog said
The Competition Commission of India (CCI) has ordered an investigation of food delivery companies Zomato Ltd and Swiggy over the companies’ apps being “neutral” platforms, the antitrust watchdog said. The watchdog's probe arm -- Director General (DG) -- will investigate the case.
The order comes months after the National Restaurant Association of India (NRAI) asked the CCI to investigate the companies for breaching platform neutrality by providing priority to exclusive contractors.
The antiregulatory body said that the alleged preferential treatment given to brands in which these platforms have an equity or revenue interest could create barriers for the restaurant to compete on fair terms.
“A conflict of interest situation has arisen in the present case, both with regard to Swiggy as well as Zomato… which may come in the way of them acting as neutral platforms,” the CCI said in an order.
The National Restaurant Association of India also alleged that the commission charged by the platforms from restaurants “are to the tune of 20% to 30%, which are extremely exorbitant”.
“Prima facie there exists a conflict of interest situation, warranting a detailed scrutiny into its impact on the overall competition between the restaurant partners vis-a-vis the private brands or entities which the platforms may be incentivised to favour,” the regulator said.
The Competition Commission of India has directed its investigative arm to submit an inquiry report within 60 days.