CCI probe finds Swiggy, Zomato’s exclusivity deals breached antitrust laws: Report

An investigation by the Competition Commission of India (CCI) has revealed that food delivery giants Zomato and Swiggy engaged in anti-competitive practices that favoured select restaurant chains on their platforms, reported Reuters citing documents.

According to non-public findings, Zomato entered into “exclusivity contracts” with restaurant partners in exchange for reduced commission fees, while Swiggy offered business growth guarantees to certain outlets on the condition of exclusivity.

The CCI’s investigation arm found that these exclusivity agreements between the platforms and their restaurant partners hindered market competition, preventing a more level playing field within the food delivery sector.

The documents, which Reuters said it has reviewed, state that such practices distort competition and benefit the involved players at the expense of others in the industry.

In line with the CCI’s confidentiality rules, the investigation findings have not been made public but were shared with Swiggy, Zomato, and the complainant restaurant groups in March 2024, reported Reuters.

The next phase of the investigation will see the CCI leadership reviewing the findings to determine if any penalties or changes to business practices will be imposed on Swiggy and Zomato, according to the report.

The antitrust body ordered an investigation into Zomato and Swiggy following a complaint from the National Restaurant Association of India (NRAI) in April 2022.

NRAI had expressed concern over the impact on food outlets due to alleged anti-competitive practices of the platforms. It had asserted that the pain points were sharply amplified during the pandemic as restaurants and cloud kitchens struggled to survive due to their increasing reliance on these aggregators.

Zomato, with a market capitalisation of ₹2.17 lakh crore, was trading at ₹247 per share at the close. Zomato's stock has soared more than 98% year-to-date but declined 3.22% on Friday.