In 2022, the Competition Commission of India (CCI) launched a probe into alleged anticompetitive business practices of Swiggy and Zomato
Earlier this year in April, the antitrust watchdog shared the confidential findings concerning Swiggy with representatives of the National Restaurant Association of India
Consequently, Swiggy filed a petition against the CCI’s order last month, arguing that allowing the NRAI access to sensitive information could harm its business
The Karnataka High Court has directed the Competition Commission of India (CCI) to take a fresh call on its April 24 order that allowed the National Restaurant Association of India (NRAI) access to confidential information on Swiggy’s business practices.
Justice SR Krishna Kumar on Wednesday asked the CCI to “expeditiously” decide on the report access after Swiggy
filed a petition against India’s competition regulator’s order, calling it “arbitrary” and arguing that allowing the NRAI access to sensitive information could harm its business, Bar and Bench reported.
While Justice Kumar directed the antitrust watchdog to take a decision promptly, he did not fix any specific timeline.
The matter stems from the CCI’s April 2022 investigation into Swiggy and Zomato, based on a complaint filed by the NRAI in 2021 that alleged 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.
The NRAI had also alleged that both Swiggy and Zomato indulged in deep discounting which hurt the interests of local restaurants, as well as argued that these pricing practices violated platform neutrality.
It is pertinent to note that Zomato and Swiggy have a near duopoly in the food delivery market, with Zomato extending its lead over Swiggy with a 56-57% market share.
After conducting a probe into these allegations, the CCI’s Director General (DG) compiled a detailed report containing confidential information concerning the business practices of Swiggy and Zomato.
While the CCI shared the confidential findings with a specific set of people at the time, on April 24 this year, the antitrust watchdog passed an order giving the NRAI’s representatives access to the report as well.
Consequently, Swiggy petitioned the Karnataka High Court last month against the CCI’s April 24 order, reportedly arguing that the decision violated the regulator’s obligation to preserve confidential information under Section 57 of the Competition Act, 2022 and Regulation 25 of the Competition Commission of India (General) Regulations, 2009.
The development comes amid reports that Walmart-backed ecommerce major Flipkart previously held talks with Swiggy to acquire a stake in the foodtech company.
Meanwhile, Swiggy is gearing up for its public listing. Earlier this year, the company received board approval for a INR 10,400 Cr ($1.25 Bn) public issue, comprising a fresh issue of shares worth INR 3,750 Cr ($450 Mn) and an offer for sale (OFS) component of INR 6,664 Cr ($800 Mn).
In the run up to its IPO, Swiggy aggressively cut costs, streamlined operations and scaled up revenues. Earlier this week, Prosus, in its 2024 annual report, said that Swiggy posted a 24% year-on-year (YoY) jump in its revenue in the calendar year 2023, excluding mergers and acquisitions, largely on the back of a 26% YoY increase in gross order value (GOV).
Earlier this year, Inc42 reported that Swiggy was set to clock about INR 10K Cr in revenue in FY24, fueled by the rise in its Instamart orders and platform fees related to food delivery.
