Connect with us

Latest News

Zomato and Swiggy Found in Violation of Competition Laws by India’s CCI

Published

on

Zomato and Swiggy Found in Violation of Competition Laws by India’s CCI

The Competition Commission of India (CCI) has determined that leading food delivery platforms Zomato and Swiggy have violated competition laws, as reported by Reuters. This investigation, initiated in 2022 following a complaint from the National Restaurant Association of India (NRAI), revealed practices that allegedly favored select restaurant partners, thereby undermining fair competition within the market.

Key Findings of the Investigation

The CCI’s probe highlighted several critical issues, primarily focusing on exclusivity agreements and restrictive pricing policies. Zomato reportedly engaged in “exclusivity contracts” with certain restaurants, allowing them to benefit from lower commission rates. In contrast, Swiggy provided growth guarantees to restaurants that committed to listing exclusively on its platform. These arrangements are seen as creating barriers for new entrants and stifling competition, ultimately impacting consumer choice.

Pricing Pressure and Market Dynamics

Both platforms were also found to exert pressure on restaurants to maintain uniform pricing across different platforms. Zomato enforced strict pricing and discount restrictions, including penalties for non-compliance, while Swiggy allegedly warned partners that their rankings would be adversely affected if they offered lower prices on competing platforms. Such practices have raised concerns about their impact on market competitiveness and the overall health of the food delivery ecosystem.

Impact on Market Value and IPO Prospects

The CCI’s findings were confidential but were shared with Zomato, Swiggy, and the NRAI in March 2024. Following the news of the investigation, Zomato’s stock experienced a 3% drop, indicating immediate market repercussions. Swiggy is facing additional scrutiny as it approaches its $1.4 billion IPO, which is set to be the second-largest in India this year. The CCI investigation has been cited as a potential “internal risk” in its IPO prospectus, highlighting concerns about compliance with competition laws.

Strategic Responses from Zomato and Swiggy

In light of the investigation’s findings, Swiggy ended its “Swiggy Exclusive” program in 2023 and plans to launch “Swiggy Grow,” aimed at expanding its services into non-metropolitan areas. Both companies have significantly transformed India’s food delivery landscape but are now also venturing into “quick commerce,” promising grocery deliveries within 10 minutes—a sector currently under separate scrutiny for alleged predatory pricing practices.

Regulatory Scrutiny in India’s Digital Market

The CCI’s investigation underscores the increasing regulatory scrutiny faced by digital platforms in India as they navigate aggressive growth strategies amid rising compliance demands. The final decision regarding potential penalties or required changes to business practices is expected soon, with both Zomato and Swiggy likely to challenge any adverse rulings.

This case not only highlights the complexities of competition law in India’s rapidly evolving digital market but also raises broader questions about how major players like Zomato and Swiggy balance innovation with regulatory compliance in an increasingly competitive landscape.

Continue Reading
Advertisement
1 Comment

1 Comment

  1. Binance

    May 4, 2025 at 6:31 am

    Can you be more specific about the content of your article? After reading it, I still have some doubts. Hope you can help me.

Leave a Reply

Your email address will not be published. Required fields are marked *

Latest News

Dunzo Gets Breather as NCLT Rejects Insolvency Petition from Invoice Discounters

Published

on

Dunzo

The National Company Law Tribunal (NCLT) Bengaluru bench has dismissed an insolvency plea filed against quick commerce startup Dunzo by its invoice discounters, declaring the petition “not maintainable” after several postponements. This decision offers temporary relief to Dunzo, which has been facing multiple insolvency petitions from various creditors, including Velvin Packaging Solutions and Betterplace Safety Solutions, over unpaid dues.

The invoice discounters alleged that Dunzo had paid only 50% of the required amounts, though the exact sum was not disclosed. Despite ongoing settlement talks, no resolution was reached, and the tribunal noted Dunzo’s delays in responding to creditor petitions. Dunzo continues to grapple with severe liquidity issues, delayed payments, and significant losses—reporting a ₹1,801.8 crore loss in FY23 and owing approximately ₹11.4 crore to major vendors like Google India and Facebook India.

While this NCLT ruling provides Dunzo some breathing room, the company still faces ongoing financial and operational challenges as it works to resolve its outstanding liabilities.

Continue Reading

Latest News

How a Golden Retriever Became the Heart and Soul of a Hyderabad Startup’s Workplace

Published

on

Golden Retriever in workplace

Hyderabad-based startup Harvesting Robotics has won hearts online by appointing a golden retriever named Denver as its Chief Happiness Officer (CHO). Denver, introduced by co-founder Rahul Arepaka in a viral LinkedIn post, has quickly become the star of the office, spreading joy and boosting morale among employees. The company is now officially pet-friendly, a move Arepaka calls their “best decision.”

Denver’s new role has sparked widespread attention, with thousands liking and commenting on the announcement. Many see Denver’s presence as more than just a cute story—it highlights a growing trend of pet-friendly workplaces that prioritize employee well-being and happiness. As companies increasingly focus on holistic wellness, Denver’s appointment shows that sometimes, a wagging tail is the best way to brighten the workday.

Continue Reading

Inverstors Stories

Info Edge Shareholders Approve ₹1,000 Crore Investment in New Venture Fund

Published

on

Info Edge

Info Edge (India) Ltd shareholders have overwhelmingly approved an investment of up to ₹1,000 crore in the company’s third venture capital fund, Info Edge Ventures Fund III. The proposal received near-unanimous backing, with 99.9995% of valid votes in favor out of 1,274 participants.

Smartweb Internet Services Ltd, a wholly owned Info Edge subsidiary, will act as sponsor and investment manager for the new fund. This move strengthens Info Edge’s commitment to backing early-stage startups and expanding its footprint in India’s venture capital landscape.

Info Edge has a strong track record as an early investor in leading Indian startups like Zomato and PB Fintech, with combined holdings in these firms valued at ₹31,500 crore ($3.7 billion) as of March 31, 2025.

Continue Reading
Advertisement

Recent Posts

Advertisement