CCI orders investigation against Zomato & Swiggy over law violations

The complaint was filed by the National Restaurant Association of India (NRAI) in July 2021.

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On Monday, April 4, the Competition Commission of India (CCI) bashed food aggregators Zomato & Swiggy over complaints regarding delayed payment cycle, imposition of one-sided clause & exorbitant commission.

The trade regulator has said that this alleged action “requires an investigation” & the report should be submitted within 60 days. “The Commission is of the view that there exists a prima facie case with respect to some of the conduct of Zomato and Swiggy, which requires an investigation by the director general (DG), to determine whether the conduct of platforms have resulted in contravention of the provisions,” the CCI said in a statement.

The complaint was filed by the National Restaurant Association of India (NRAI) in July 2021. “During the (COVID-19) pandemic, the magnitude of anti-competitive practices of Zomato and Swiggy have increased manifold and despite numerous discussions with them, these deep funded marketplace platforms are not interested in alleviating concerns of the restaurants,” claimed NRAI.

As the shares of Zomato have dropped a lot since its listing this can be considered as another negative for the food aggregator. The shares of Zomato closed at a rise of 2.19% i.e Rs 86.15/share on the NSE.

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