Online food delivery platform Zomato, which is facing investigation by CCI for anti-competitive activities, has claimed that it complies with the laws of the country, while Swiggy says that it is committed to comply with local rules. On the investigation of the Competition Commission of India (CCI), both the companies termed the media reports as ‘misleading’ which alleged preferential treatment by Zomato and Swiggy to some restaurant partners. Both the platforms said that CCI has not yet passed its final order on the matter of unfair trade practices.
Zomato said in a stock exchange notice on Monday that the CCI had issued a ‘prima facie’ order on April 4, 2022, directing the office of the Director General of the Commission to investigate possible violations under the Competition Act, 2002. The company said that since the notice of April 5, 2022, the Commission has not passed any order on merits. Zomato said in the notice, “The above news is misleading. We will continue to work closely with the Commission to clarify that all our trade practices are in accordance with the Competition Act and they do not have any adverse effect on competition in India.”
On the other hand, Swiggy said in a statement that media reports related to CCI’s investigation against it confuse the investigation process and the final result. According to the statement, “Based on the CCI’s order dated April 5, 2022, the Director General investigated some aspects of our business operations. Its investigation and March 2024 report are an initial step in the ongoing investigation by the CCI, and not a final decision as claimed in some reports.”
The company said it has not yet received confidential details of the findings from the CCI to file a response to the DG’s findings. “Once Swiggy files its response and the CCI hears the matter… the CCI will then pass its judgment on whether any competition law violations have taken place or not. It is currently in the preliminary stage and no final decision or order has been issued with respect to Swiggy’s practices from 2022,” it said.
Full cooperation in the investigation: Swiggy
Swiggy said it is fully cooperating with the investigation and is committed to comply with the existing laws of the country. However, according to sources, the CCI investigation found that both the food delivery platforms were involved in unfair trade practices, including allegedly giving preference to some partner restaurants. The CCI had ordered a detailed investigation in April 2022 and the investigation report was submitted to the regulator earlier this year. The CCI Director General’s report under the standards has been shared with the concerned parties and later, they will be called for a hearing by the regulator. The regulator will pass the final order after collecting all the opinions and clarifications. The decision to initiate an investigation against the two companies was taken after a complaint by the National Restaurant Association of India (NRAI).