Swiggy, Zomato flouted competition laws, CCI finds in probe: Report
New Delhi: An investigation by India’s Competition Commission (CCI) found that major food delivery companies Zomato and SoftBank-backed Swiggy violated competition laws through practices that favoured specific restaurants on their platforms, according to confidential CCI documents.
The CCI's findings, reviewed by Reuters, reveal that Zomato entered “exclusivity contracts” with certain partners in exchange for reduced commission rates, while Swiggy assured business growth for restaurants that agreed to list exclusively on its platform.
The CCI’s investigative arm concluded that these exclusivity agreements “prevent the market from becoming more competitive.”
The antitrust inquiry into Zomato and Swiggy began in 2022 after a complaint from the National Restaurant Association of India, which alleged that the platforms' practices were negatively impacting food outlets.
These CCI documents, kept confidential by the commission’s rules, were shared with Zomato, Swiggy, and the complainant restaurant group in March 2024. This is the first time the findings have been publicly reported.
Following the Reuters report, Zomato’s shares dropped by 3% after initially remaining flat in earlier trading. Swiggy did not respond to requests for comment, while Zomato declined to comment.
Swiggy’s IPO prospectus identifies the ongoing CCI case as an “internal risk,” noting that “any breach of the provisions of Competition Act may attract substantial monetary penalties.”
Swiggy told the CCI that its “Swiggy Exclusive” program ended in 2023 but disclosed plans to launch a similar program, “Swiggy Grow,” in non-metro areas.
Both Swiggy and Zomato have transformed India’s food delivery landscape as smartphone and online ordering have surged, with hundreds of thousands of restaurants listed on their platforms.
Swiggy, which is concluding bids for its $1.4 billion IPO, India’s second-largest this year, has, along with Zomato, also pushed restaurants to maintain consistent pricing across platforms, the CCI documents noted, limiting competition by preventing restaurants from offering lower prices elsewhere.
The investigation also found that Zomato imposed pricing and discount restrictions on restaurant partners, in some cases applying penalties if these terms were not met.
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