Indian food ordering and delivery giants Swiggy and Zomato may face an investigation over anti-competitive practices as the local restaurant industry body has filed a complaint against the duo with the market regulator, the Competition Commission of India (CCI).
The National Restaurants Association of India (NRAI), which represents over 50,000 restaurants and eateries in the country, has submitted detailed information on the practices followed by food aggregators that are hurting the industry to the CCI on July 1.
“During the pandemic, the magnitude of anti-competitive practices of Zomato and Swiggy have increased manifold, and despite numerous discussions with them, these well-funded marketplace platforms are not interested in alleviating the concerns of the restaurants. In fact, during the pandemic, due to onerous terms imposed, a lot of our partners had to close shop,” the NRAI said in a statement on Monday.
In its petition to the CCI, the NRAI alleged Swiggy and Zomato charge restaurants “exorbitant commissions” and “mask customer” data from them so that restaurants can’t approach consumers directly. The complaint highlighted the fact that Zomato and Swiggy arm-twist restaurants into providing steep discounts in lieu of maintaining an appropriate listing and that non-participation by them could lower their visibility on the platform.
The NRAI also claimed that the two major online food marketplaces are breaching platform neutrality by favoring their in-house brands, aside from giving restaurants that sign exclusive agreements better benefits. Furthermore, it noted that Swiggy and Zomato sign price parity contracts with restaurants that bar them from offering their food items at lower prices on other platforms.
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