According to reports, the National Restaurants Association of India (NRAI) has filed information with the Competition Committee of India (CCI) against Zomato and Swiggy notifying that their practices have ‘appreciable adverse effect on competition’.
The submission has emphasized on the issue like bundling of services, data masking, lack of transparency, exorbitant commission and deep discounting. As far as the reports are concerned, the restaurants have been struggling with several issues while dealing with these two marketplaces, since 2018. The restaurants asserted that over a period of time, these companies’ business practices have weakened the food and beverage industry massively.
President of NRAI, Anurag Katriar in a statement cited by Moneycontrol informed that they have been in constant dialogue with the foodservice aggregators over the past 15-18 months to resolve the critical issues impacting the sector. He further claimed that irrespective of their efforts, they have not been able to resolve them with the aggregators. “The needle hasn’t moved much on these issues. We have therefore approached the CCI now to look into the matter and investigate them thoroughly”, he added.
In accordance with NRAI’s statement, during the pandemic, the magnitude of anti-competitive practices of the two companies increased manifold and despite several discussions, the companies failed to alleviate the concerns of the restaurants. The statement further notified that on the ground of onerous terms enforced during the pandemic, a lot of NRAI’s partners had to shut down their shops.
As per reports, Swiggy has gained $800 million in a new round of funding valuing the company at $5 billion. On the other hand, Zomato is looking forward to obtaining $1.2 billion through its initial public offering (IPO).