With hundreds of thousands of restaurants listing on their platforms and a rise in smartphone usage, Swiggy and Zomato have completely changed the food delivery scene in India in recent years.
An inquiry by India’s antitrust regulator found that food delivery behemoths Zomato and SoftBank-backed Swiggy had broken competition laws by favoring restaurant chains listed on their platforms.
Zomato signed into “exclusivity contracts” with restaurant partners in exchange for reduced commissions, according to the Competition Commission of India (CCI). According to the report, Swiggy promised specific eateries business development in exchange for their commitment to listed only on its platform, as detailed in confidential documents created by the CCI.
According to the findings of the CCI’s investigation, Swiggy, Zomato, and their respective restaurant partners’ exclusivity agreements hampered market competition and prevented a level playing field.
The Competition Commission of India (CCI) shared its materials with Swiggy, Zomato, and the restaurant groups that filed the complaint in March 2024, but they are not publicly accessible because to the regulator’s secrecy regulations. These results have never been published before.
The CCI, Swiggy, and Zomato have not yet responded to the issue.
Following a complaint by the National Restaurant Association of India (NRAI) about the detrimental effects of the platforms’ anti-competitive behavior on food outlets, the antitrust investigation into Swiggy and Zomato was initiated in 2022. With hundreds of thousands of restaurants listing on their platforms and a rise in smartphone use and online ordering, Swiggy and Zomato have completely changed the food delivery scene in India in recent years.
Both platforms have effectively reduced market competition by pressuring restaurants to maintain pricing parity across rival platforms in addition to exclusivity agreements. The CCI filings claim that this approach hurts restaurants by keeping them from providing lower prices on other websites.
The CCI’s leadership must decide whether to issue fines or require adjustments to Swiggy’s and Zomato’s business operations in the next stage of the investigation. The leadership is now analyzing the results. A final decision could take several weeks, and the companies can challenge the investigation’s conclusions with the CCI.