Fri Nov 08 10:20:58 UTC 2024: ## Food Delivery Giants Zomato and Swiggy Face Antitrust Scrutiny in India
**New Delhi, November 8, 2024:** India’s Competition Commission of India (CCI) has found that food delivery giants Zomato and Swiggy violated competition laws through their business practices, according to internal documents reviewed by Reuters. The investigation, which began in 2022 following a complaint from the National Restaurant Association of India, alleges that the companies engaged in anti-competitive practices that harmed restaurants.
The CCI investigation uncovered several practices deemed harmful to competition:
* **Exclusivity Contracts:** Zomato entered into “exclusivity contracts” with partner restaurants in exchange for lower commissions. Swiggy, on the other hand, guaranteed business growth to certain restaurants if they listed exclusively on its platform.
* **Price Parity:** Both platforms pressured restaurants to maintain identical prices across all online platforms, stifling competition and limiting consumers’ ability to find the best deals.
The CCI investigation documents, which were shared with Swiggy, Zomato, and the complainant restaurant groups in March 2024, conclude that these exclusivity arrangements “prevent the market from becoming more competitive.”
The investigation is now in its final phase, with CCI leadership currently reviewing the findings. A final decision, which could take several weeks, will determine whether penalties will be levied or if Swiggy and Zomato will need to modify their business practices. The companies retain the right to contest the investigation findings with the CCI.
This investigation comes as Swiggy is in the midst of closing its $1.4 billion IPO, the second largest in India this year. The findings highlight the growing concern over the market dominance of these food delivery giants and the potential for their practices to stifle competition in the Indian food delivery market.
First Piper 