Zomato and Swiggy Violate Competition Laws

The Competition Commission of India (CCI) has reportedly found that leading food delivery platforms Swiggy and Zomato are violating antitrust and competition laws by engaging in practices that favour certain restaurants on their platforms. According to CCI’s internal documents, Zomato entered into exclusivity agreements with partners in exchange for reduced commission rates, while Swiggy promised rapid growth to restaurants listing exclusively on its platform. These exclusivity deals, the CCI concluded, harm competition and prevent market growth.

The CCI launched its investigation in 2022 after the National Restaurant Association of India (NRAI) raised concerns about the impact of these anti-competitive practices on food outlets. Documents shared with Swiggy, Zomato, and the NRAI in March 2024 revealed the findings, though they had not been publicly disclosed until now.

Swiggy claimed it ended its “Swiggy Exclusive” program in 2023 but plans to introduce a new initiative, Swiggy Grow, in non-metropolitan areas. During the investigation, CCI also noted that Swiggy threatened restaurants with lower rankings if they didn’t adhere to price parity, while Zomato was accused of imposing pricing restrictions and penalties for non-compliance.

This antitrust investigation is a significant risk factor for Swiggy's upcoming IPO, where any violation of competition laws could result in hefty penalties. Both Swiggy and Zomato have the option to contest the findings, but the final decision from the CCI may take several weeks.