Conduct of Swiggy, Zomato requires investigation: CCI

(Representative image: Reuters)

The conduct of food aggregators Swiggy and Zomato, which are facing allegations such as delayed payment cycle, imposition of one-sided clauses and exorbitant commission, "requires an investigation", the Competition Commission of India (CCI) ordered on April 4.

The fair trade regulator has asked its director general to conduct a detailed inquiry into the accusations and submit a report within 60 days.

"The Commission is of the view that there exists a prima facie case with respect to some of the conduct of Zomato and Swiggy, which requires an investigation by the director general (DG), to determine whether the conduct of platforms have resulted in contravention of the provisions," the CCI noted.

The order was issued on the complaint filed by the National Restaurant Association of India (NRAI), which represents over 50,000 restaurant operators across the country.

The association had approached the antitrust body in July last year, seeking a probe into the allegations of data masking, deep discounting and violation of platform neutrality against Zomato and Swiggy.

"During the (Covid-19) pandemic, the magnitude of anti-competitive practices of Zomato and Swiggy have increased manifold and despite numerous discussions with them, these deep funded marketplace platforms are not interested in alleviating concerns of the restaurants,” it had claimed.

NRAI alleged that the commissions that are charged from restaurants are "unviable" and "are to the tune of 20 percent to 30 percent, which are extremely exorbitant".

Zomato was accused of charging approximately 27.8 percent of the order value from the restaurants listed on its platform. For cloud kitchen, the commission rate is as high as 37 percent, the complainant had claimed.