CCI to probe Zomato, Swiggy over neutrality

The order comes months after the National Restaurant Association of India $($NRAI$)$ asked the CCI to investigate the companies for breaching platform neutrality by providing priority to exclusive contractors...

Reuters April $05,2022,12$:$49$ IST

Competition Commission of India $($CCI$)$ has ordered an investigation

Swiggy over the companies' apps being "neutral" platforms, the anit$-$trust agency said on Monday.

The order comes months after the National Restaurant Association of India $($NRAI$)$ asked the CCI to investigate the companies for breaching platform neutrality by providing priority to exclusive contractors. The NRAI, which represents more than $500,000$ restaurants across India, also alleged Zomato and Swiggy were misusing consumer data, charged exorbitant commissions and provided massive discounting.

"The Commission observes that it has already found merit in investigating the issue pertaining to platform neutrality," the CCI said, but added that it did not see merits in allegations of delayed payments, "one$-$sided clauses" and "exorbitant commission etc." being linked to competition.

"A conflict of interest situation has arisen in the present case, both with regard to Swiggy as well as Zomato $...$ which may come in the way of them acting as neutral platforms," the CCI said in an order. Swiggy and Zomato did not immediately respond to emails seeking comment.

Q$2.$ The CCI has found merit that Swiggy and Zomato were not maintaining platform neutrality. What business implication does it have for them?