Food delivery giants Swiggy and Zomato have reshaped the way Indians order food in recent years.
New Delhi:
An investigation by India’s antitrust body has found food delivery giant Zomato and SoftBank-backed Swiggy violated competition laws, with their business practices favoring restaurant chains listed on their platforms, documents show.
Zomato entered into “exclusivity contracts” with partners in return for lower commissions, while Swiggy guaranteed business growth to certain players if they listed exclusively on its platform, according to non-public documents prepared by the Competition Commission of India (CCI).
The exclusive arrangement between Swiggy, Zomato and their respective restaurant partners “prevents the market from becoming more competitive,” CCI’s research arm said in a finding reviewed by Reuters on Friday.
The CCI documents are not public, as per its privacy rules, and were shared with Swiggy, Zomato and the complainant restaurant groups in March 2024. Their findings have not been previously reported.
Zomato declined to comment, while Swiggy and CCI did not respond to Reuters queries.
An antitrust investigation against Swiggy and its top rival Zomato began in 2022 after the National Restaurant Association of India complained about the impact on food outlets due to the platforms’ anti-competitive practices.
Food delivery giants Swiggy and Zomato have reshaped the way Indians order food in recent years, with hundreds of thousands of outlets listed on their apps and online ordering, both using smartphones, growing rapidly.
Both Swiggy, which is closing bidding for its $1.4 billion IPO on Friday – India’s second largest this year, and Zomato have in recent years also pressured restaurants to maintain price parity, reducing direct competition in the market.
That practice affects restaurants as they cannot offer lower prices on other online platforms, CCI documents said.
The next, and final, step in the CCI case is a decision by the CCI leadership which is still reviewing the investigation findings to decide whether to impose any penalty or change order on Swiggy’s and Zomato’s business practices.
A final decision could take several weeks, and companies still have the option of contesting the investigation findings with the CCI.
(This story has not been edited by NDTV staff and is automatically generated from a syndicated feed.)