CCI investigation finds Zomato and Swiggy in violation of competition rules

New Delhi: The Competition Commission of India (CCI) has concluded an investigation into the business practices of food delivery giants Zomato and Swiggy, revealing that both companies have breached antitrust laws. 

These findings, which stem from a detailed probe initiated in 2022 following complaints by the National Restaurant Association of India (NRAI), highlight practices that favour select restaurant partners, potentially skewing market competition.

The investigation, spearheaded by the CCI's Director General, uncovered that Zomato and Swiggy had engaged in exclusivity arrangements with certain restaurant partners. These contracts were designed to give these partners reduced commission rates in exchange for not listing on competing platforms. 

According to the CCI report, such practices "prevent the market from becoming more competitive," as they limit restaurants' ability to engage with multiple service providers or offer competitive pricing elsewhere.

Swiggy, in particular, had phased out its "Swiggy Exclusive" program in 2023 but was planning to relaunch a similar initiative, "Swiggy Grow," aimed at non-metropolitan areas. Zomato, on the other hand, was found to impose strict pricing and discount restrictions on its restaurant partners, sometimes with penalties for non-compliance.

The CCI is now in the process of reviewing these findings, with the final decision expected to influence how food delivery aggregators operate in India.