NRAI asks CCI to look into anti-competitive behavior of Zomato & Swiggy
The imposition of Lockdown took a toll on almost every industry but the Food industry is one of many industries which suffered huge losses as dine-in was completely forbidden. However take-away food was allowed throughout the pandemic, even during lockdowns. For almost a year, food restaurants and food delivery platforms like Zomato and Swiggy have been at loggerheads because of alleged anti-competitive practices by food delivery aggregators. The National Restaurants Association of India (NRAI) has now approached the Competition Commission of India (CCI) alleging that food delivery aggregators like Zomato and Swiggy have violated laws by charging exorbitant commissions from restaurants and “masking” customer data from them.
The move is the latest in an escalating conflict between restaurants and food delivery platforms. The NRAI alleging that “onerous terms” imposed by Swiggy and Zomato have led to many restaurants having to wind up their businesses during the pandemic.
Allegations made by NRAI
The NRAI notes that anti-competitive practices by the two companies particularly hurt restaurants during the pandemic as they dealt with an increased preference for delivery over dine-in services and an overall fall in business. NRAI in its statement said:
“During the pandemic, the magnitude of anti-competitive practices of Zomato and Swiggy have increased manifold despite numerous discussions with them. These deeply funded platforms are not interested to alleviate the concerns of the restaurants.”
The NRAI also alleged that restaurants are forced to offer deep discounts to maintain an appropriate listing on online platforms. In an earlier market study by the CCI, restaurants alleged that commissions paid by them affected their search rankings and sought greater transparency in the listing policies of online food.
NRAI’s President’ statement
In their statement, President of NRAI Anurag Katriar said, “We have been in constant dialogue with the foodservice aggregators over the last 15-18 months to resolve critical issues impacting the sector. However, despite all our efforts, unfortunately, we have not been able to resolve them with the aggregators. The needle hasn’t moved much on these issues. We have therefore approached the CCI to look into the matter and investigate them thoroughly.”
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