Zomato Dismisses Antitrust Violation Charges As Inconclusive

Zomato has responded with a strong rebuttal on the recent investigation allegations for breaching antitrust laws prompted by the CCI on April 4, 2022.

The Competition Commission of India began investigating antitrust allegations against Zomato and Swiggy on April 4, 2022, over the two platforms’ practices. While Swiggy has remained silent about the investigation’s updates, Zomato has come forward with a strong rebuttal. The company claims that the recent news resurfacing on the internet with fresh allegations is completely false and misleading.

The two biggest aggregator platforms came under the CCI’s scrutiny for alleged non-compliance with India's antitrust laws, including listing preferences for restaurant partners and pricing inconsistency across platforms. In simple words, users who use both platforms would realize that the same restaurant and dish on both platforms differ without much clarity on why. While users enjoyed the best price comparison to make their transactions, the companies came under the CCI’s radar.

However, Zomato has not only made a strong public response claiming complete compliance but also assured stakeholders that the platform fully complied with the Competition Act of 2002 and did not harm market competition.

“The aforementioned news article is misleading,” said Sandhya Sethia, Zomato’s Company Secretary and Compliance Officer. She also mentioned that after the investigation prompt in 2002, there have been “no further reportable events.” The company also mentioned that the CCI did not send a directive for additional regulatory disclosure under the SEBI rules for any progress in the investigation (Listing Obligations and Disclosure Requirements) Regulations of 2015.

Zomato also notified stakeholders and consumers that it is dedicatedly cooperating with the CCI in addressing any concerns, and will keep them informed of recommendations that may emerge during the investigation.

Zomato and Swiggy have come back into the spotlight after two years for engaging in unfair market practices. While these are limited to the price differences on both platforms for the same restaurant partner, the main reason is the basic listing price difference, excluding partner fees, platform fees, taxes, discounts, and other charges.