Zomato and Swiggy’s Alleged Unfair Practices Uncovered

Varahi media.com online news,November 10th,2024: Food delivery giants Zomato and Swiggy are facing scrutiny following a recent investigation by the Competition Commission of India (CCI), which accuses both platforms of practices that restrict fair competition.

The report highlights exclusive agreements both companies have made with local restaurants, creating an uneven playing field. For example, Zomato reportedly offered restaurants lower commission rates in exchange for platform exclusivity.

Similarly, Swiggy’s previous ‘Swiggy Exclusive’ program boosted partner visibility in return for limiting their presence on other platforms. Swiggy’s upcoming ‘Swiggy Grow’ program, set to launch in smaller cities, is stirring similar concerns.

Further investigation suggests the platforms imposed price parity clauses, requiring restaurants to maintain consistent prices across all platforms, which has potentially hindered competition.

Public reaction on social media has been swift, with many users criticizing the companies for allegedly misusing their dominant position in the market. One user described it as “a monopoly disguised as convenience.”

The CCI report has had immediate repercussions, with Zomato’s stock falling by 3% and Swiggy labeling the investigation as an “internal risk.” If found to be in breach of the Competition Act, both companies could face financial penalties, although they retain the right to appeal the findings.

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