NRAI seeks interim relief from CCI against Zomato in antitrust case

Restaurant body asks the CCI to restrain Zomato from imposing exclusivity and price-parity clauses while the competition watchdog's antitrust proceedings continue

The National Restaurant Association of India (NRAI) has sought immediate relief from the Competition Commission of India (CCI), urging the watchdog to direct Zomato to refrain from imposing exclusivity clauses and price-parity provisions while the long-running antitrust case remains pending.

 

“Zomato cannot be permitted to approbate and reprobate. Having represented to the director general (D-G) and this commission that it has not enforced, has discontinued, or has removed the impugned practices, Zomato must be held to those positions and directed to continue adhering to them during the pendency of the proceedings,” a senior NRAI executive told Business Standard.

 

In an application filed with the CCI, the NRAI has also urged the regulator not to grant Zomato any further adjournments. The matter is scheduled to be heard by the CCI on July 22.

   

In 2022, the CCI ordered a D-G investigation into Zomato and Swiggy following a complaint by the NRAI, alleging anti-competitive practices in the online food delivery market. The probe covered allegations including concerns over platform neutrality arising from Cloud kitchens and private labels, price-parity clauses, exclusivity arrangements, and other vertical restraints imposed on restaurant partners.

 

According to sources, the D-G’s investigation has concluded that three categories of contractual arrangements used by Zomato — exclusivity conditions, minimum business guarantees, and wide price-parity clauses — contravened Section 3(4), read with Section 3(1), of the Competition Act, 2002. These provisions deal with vertical agreements that cause, or are likely to cause, an appreciable adverse effect on competition.

 

The D-G’s conclusions, however, are investigative findings and do not constitute the CCI’s final decision on the matter. The NRAI has sought a direction from the CCI that Zomato should not impose, monitor, enforce, or penalise any exclusivity condition during the pendency of the proceedings.

 

The association has also raised concerns about price-parity clauses, which it said can prevent restaurants from offering lower prices or more favourable terms on their own websites or through competing platforms.

 

The case forms part of broader antitrust scrutiny of food delivery platforms, where issues such as market dominance, data practices, and platform neutrality have come under regulatory focus.

 

In a similar CCI probe, delivery platform Swiggy challenged the CCI’s refusal to permit the cross-examination of third parties whose statements form part of the investigation record. In April, the Karnataka High Court continued its interim protection in favour of Swiggy, extending the stay on proceedings before the commission in the ongoing antitrust probe. 

Zomato did not respond to queries from Business Standard by the time of going to press.