CCI Probe: Swiggy, Zomato Say Haven’t Received Any Further Updates

SUMMARY

Food delivery giants Zomato and Swiggy have rejected the recent media reports which said that the companies were found to be in violation of the competition laws in a probe by CCI

The companies, in separate statements, said that the CCI’s investigation is ongoing and there have been no further updates on the matter from the antitrust body

Last week, reports said that the CCI probe found the companies in violation of the country’s competition laws

Food delivery giants Zomato and Swiggy have rejected the recent media reports which said that the companies were found to be in violation of the competition laws in a probe by the Competition Commission of India (CCI).

The companies, in separate statements, said that the CCI’s investigation, launched in April 2022, is ongoing and there have been no further updates on the matter from the antitrust body.

Last week, reports said that the CCI probe found the companies in violation of the country’s competition laws, with their partnerships favouring certain restaurant partners.

In an exchange filing, Zomato said that the CCI issued a prima facie order in April 2022, asking the Office of the Director General (DG) of the Commission to investigate potential violations under the Competition Act, 2002.

“Since the intimation of April 5, 2022, the Commission, on merits, has not passed any order. Hence, there have been no further reportable events…,” it said.

Meanwhile, IPO-bound Swiggy said that the DG investigated “certain aspects” of the company’s business and its March 2024 report is a preliminary step in the investigation.

“Swiggy is yet to receive the confidential details of the findings from the CCI for filing a response to the DG’s finding. Once Swiggy submits its response and CCI conducts a hearing on the matter, CCI will pass its decision on whether any competition law violations have occurred,” the statement added.

Notably, the companies were investigated by the CCI in 2022, based on a complaint filed by the National Restaurant Association of India (NRAI) in 2021 alleging that the food delivery giants engaged in anticompetitive practices such as bundling of services, exorbitant commissions, delayed payment cycle and imposition of one-sided clauses.

At the time, the NRAI alleged that both the companies indulged in deep discounting, hurting the interests of local restaurants as well. Besides, their pricing practices violated platform neutrality, it alleged.

The development comes on the heels of Swiggy’s public market debut. The company’s IPO, which closed last week, saw 3.59X subscription.

Shares of Zomato were trading 0.9% higher at INR 251.45 on the BSE at 12 PM.