Food delivery giants Zomato and Swiggy have been under fire after a recent investigation by the Competition Commission of India (CCI), accusing both platforms of engaging in practices that harm the competition.
The report reveals that both companies made several exclusive agreements with local restaurants, creating an unfair playing field.
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For instance, Zomato offered reduced commission rates to restaurants if they agreed to exclusivity with the platform.
Similarly, Swiggy’s now-discontinued ‘Swiggy Exclusive’ program promised enhanced business to partners in exchange for limiting their visibility on other platforms.
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Swiggy’s upcoming ‘Swiggy Grow’ program is also aiming at something similar and is supposed to launch in smaller cities soon, sparking many concerns.
Further investigation into the matter revealed that the platforms imposed price parity clauses, forcing many restaurants to keep the prices the same across all platforms, thus limiting the competition.
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Social media has taken these allegations very seriously, with people openly voicing out their frustration. One user accused the platforms of misusing their dominant market position, calling it ‘a monopoly disguised as convenience.’
Apart from getting cooked on social media, the companies also had to face other consequences. Following the report, Zomato’s stock dropped by 3%, while Swiggy had to label the CCI investigation as ‘internal risk’.
The companies could even face monetary penalties if found in breach of the Competition Act, though they will still have the right to appeal the findings.
