Food Delivery Giants in Antitrust Hot Water

India's antitrust authority alleges Zomato and Swiggy engaged in anti-competitive practices, favoring select restaurants through exclusivity deals. These practices deter market competitiveness, the Competition Commission of India's investigation reveals. Both companies may face penalties, while their business strategies continue to reshape India's food delivery landscape.

India's leading food delivery platforms, Zomato and Swiggy, are facing scrutiny from the country's antitrust body for allegedly breaching competition laws. An investigation by the Competition Commission of India (CCI) found that both companies engaged in business practices that favored particular restaurant partners, potentially stifling market competition.

Documents reveal that Zomato entered into exclusivity contracts with selected eateries to lower commissions, while Swiggy guaranteed business growth to partners exclusively listing on its platform. The findings, uncovered by Reuters, are not public and were circulated to the companies and the complainant restaurant group in March 2024.

The case highlights internal risks in Swiggy's IPO prospectus, anticipating potential monetary penalties for breaching competition laws. Meanwhile, Zomato and Swiggy continue reshaping the food delivery market, despite controversies surrounding their strategies.

(With inputs from agencies.)