The Competition Commission of India (CCI) has reportedly found food delivery majors Swiggy and Zomato guilty of violating competition laws through their partnerships with select restaurants.
Zomato enters exclusive contracts, Swiggy guarantees growth
According to a non-public CCI report cited by Reuters, Zomato entered into exclusivity contracts with certain restaurant partners in exchange for lower commissions, while Swiggy guaranteed business growth to select players for exclusive listings.
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The report stated that these exclusivity arrangements “prevent the market from becoming more competitive.”
This ruling comes after the CCI investigated the companies in 2022, following a complaint filed by the National Restaurant Association of India (NRAI) in 2021. The NRAI alleged anticompetitive practices, including bundling services, exorbitant commissions, delayed payments, and one-sided clauses.
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Additionally, the NRAI claimed that deep discounting harmed local restaurants and violated platform neutrality.
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This development coincides with Swiggy’s ongoing IPO, which closes today and has been subscribed 3.58 times so far. The Qualified Institutional Buyers (QIBs) portion was oversubscribed by 602%.
Meanwhile, Zomato’s shares ended the trading session 2.37% lower at INR 249.10 on the BSE.
