New Delhi: There is a bad news for Zomato. CCI has started investigation against Zomato. In fact, on February 21, our affiliate website Mbig Bhandara News reported that the National Restaurant Association of India had complained to the Competition Commission of India (CCI) against Zomato for charging high commissions and misusing customers’ personal information
Probe ordered against Swiggy and Zomato
Taking cognizance of this, the Competition Commission of India (CCI) has ordered an investigation against leading food delivery companies Swiggy and Zomato. CCI has issued orders for investigation regarding the operations and business model of these companies. In fact, the commission has ordered an inquiry on both the companies for alleged violation of Section 3(1) and 3(4) of the Competition Act.
CCI said this in the order
The CCI, while issuing a copy of the order on April 4,2022,has said,
Primarily in view of some conduct of Zomato and Swiggy,investigation by the Director General (DG)
seems necessary against them.Through investigation,it can be found out whether the conduct of these companies violates sections 3.Bhandara Food
(1) and 3(4) of the Competition Act or not.The commission has ordered the DG to conduct a detailed inquiry in the context of section 26(1) of the Competition Act. Not only this, the commission has also asked the DG to submit the report of the investigation within 60 days of receipt of this order.
Know the whole matter
NRAI has alleged that aggregators with more than 90 per cent market share in India’s food delivery industry are violating India’s competition law by offering huge discounts, exclusive tie-ups and preference for certain restaurant partners.
This is also affecting the business of restaurants and new restaurant players
are getting less opportunity to enter the industry.After this,CCI took immediate cognizance of this
and said that some things said by NRAI should be investigated.Both these companies have been accused
the restaurant body like delayed payment cycle,unilateral clauses in the agreement,
charging a lot of commission.