Top restaurant body moves CCI for redress on issues with Zomato, Swiggy

Main issues include bundling of services, data masking and exorbitant commissions, deep discounting, including forcing the restaurant partners to give discounts to maintain listing

Alleging “anti-competitive practices” by Zomato and Swiggy, restaurant industry body National Restaurant Association of India (NRAI) on Monday said it has approached fair trade regulator Competition Commission of India (CCI) for a detailed probe against the food aggregators.

Keeping the interests of restaurants in mind, NRAI on July 1 had filed information with the CCI, it said in a statement.

The main issues highlighted by the association in the submission are bundling of services, data masking, and exorbitant commission charged, price parity agreements, deep discounting, including forcing restaurant partners to give discounts to maintain appropriate listing, exclusivity of listed restaurants, and violation of platform neutrality, vertical integration, and lack of transparency on the food ordering platforms.

“We have been in constant dialogue with the food service aggregators over the past 15-18 months to resolve critical issues impacting the sector. However, despite all our efforts, we have unfortunately not been able to resolve them with the aggregators. The needle hasn’t moved much on these issues. We have, therefore, approached the CCI to look into the matter and investigate them thoroughly,” said Anurag Katriar, president, NRAI.

Since 2018, restaurants have been highlighting several issues in their dealings with the marketplace platforms, said NRAI. When these marketplace platforms started, they had certain advantages. However, over a period, their business practices started hurting the food and beverage (F&B) industry. There have been multiple discussions and deliberations between NRAI and restaurant aggregators, but no amicable solution was reached, it added. 

As part of the e-commerce study conducted by CCI under its advocacy measures, NRAI also sent its recommendations to the CCI and participated in various workshops conducted under the aegis of CCI, highlighting various practices by Swiggy and Zomato. NRAI played a leading role in highlighting the concerns of restaurants to CCI in the workshops.

During the pandemic, NRAI said the magnitude of anti-competitive practices by Zomato and Swiggy had increased manifold and despite discussions, “these deep-funded marketplace platforms were not interested in alleviating the concerns of restaurants. In fact, during the pandemic, due to the onerous terms imposed, a lot of our partners had to shut shop”.

“We are committed to the cause of our partners, and we will put our best efforts with the CCI to ensure the practices of these marketplace platforms are aligned to the benefit of the entire F&B industry,” added Katriar.