NRAI Likely To Move CCI Against Swiggy, Zomato On 10-Minute Food Delivery Apps

SUMMARY

Alleging the duo of masking customer data, Daryani further added that NRAI is not okay with Zomato and Swiggy engaging in private labelling and selling food directly via Blinkit’s Bistro app and Swiggy’s Snacc app for quick food delivery

Daryani also highlighted that these platforms have access to crucial consumer data but do not share this information with restaurant partners

It is pertinent to note that the NRAI has not only been vocal about its concerns regarding Zomato and Swiggy's business practices but is already battling two legal cases against Swiggy and Zomato alleging they have engaged in anti-competitive practices

Adding to the woes of Zomato and Swiggy’s anti-competitive practices, the National Restaurant Association of India (NRAI) is likely to approach the Competition Commission of India (CCI) to seek intervention regarding the launch of 10-minute food delivery standalone apps, Bistro and Snacc.

As per an ET report, citing NRAI’s president as well as Wow Momo’s cofounder and CEO, Sagar Daryani, NRAI is seriously considering taking legal action against both companies.

Daryani also highlighted that these platforms have access to crucial consumer data but do not share this information with restaurant partners.

“They have access to all our data, which they do not share with us. For us, there is complete consumer masking. We have no reason to believe they are not migrating our customers to the products they sell as private labels on their apps, whether it’s data from a tea brand, biryani, or momo,” the publication cited Daryani.

The NRAI fears that Zomato and Swiggy might be using this data to divert customers towards their products sold through these apps.

Earlier this week, the Sriharsha Majety-led company rolled out a new app, ‘SNACC’, targeting a 15-minute food delivery service in select parts of Bengaluru. Following this, Zomato has launched its 15-minute food delivery service.

It is pertinent to note that the NRAI has not only been vocal about its concerns regarding Zomato and Swiggy’s business practices but is already battling two legal cases against Swiggy and Zomato alleging they have engaged in anti-competitive practices.

Just a day ago, NRAI asked the government to allot industry status to the food services sector, seeking an equitable and fair e-commerce policy to provide a level-playing field to protect restaurants, delivery partners as well as consumers from potentially exploitative practices of platforms.

The association previously 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.

Just a few months ago, the CCI reportedly found that foodtech majors Swiggy and Zomato breached competition laws, with their partnerships favouring select restaurants.

Notably, the companies were earlier investigated by the CCI in 2022, based on a complaint filed by the National Restaurant Association of India (NRAI) in 2021.

This comes at the heart of several ecommerce and consumer service companies either looking to or entering the quick commerce segment. This trend is in response to the changing behaviours of consumers wherein they prefer having products delivered within a short span.

To mention a few, Amazon, Flipkart, Reliance’s JioMart and Tata BBNow have recently ventured into the segment.

This, in turn, demands for better anti-competition norms and practices for ensuring these restaurant partners, especially the smaller ones, a fair play.