Zomato, Swiggy deny CCI antitrust violations, say media report 'misleading'

Deepinder Goyal-led Zomato clarified to the BSE that although the CCI initiated a preliminary investigation in April 2022, no findings or orders have been issued against the food delivery platform

Following media reports indicating an antitrust investigation by the Competition Commission of India (CCI) into its business practices, Zomato addressed the claims on Sunday (November 11), calling them “misleading”. In a statement to the BSE, Zomato clarified that while the CCI had initiated a preliminary inquiry back in April 2022, no final findings or orders had been issued against the company. Reaffirming its commitment to compliance with Indian competition laws, Zomato emphasised its readiness to cooperate with the investigation and respond to any inquiries from the regulator.

 

What did media reports say about Zomato’s ‘unfair practices’?

 

In response to media reports suggesting that Zomato and Swiggy had violated antitrust regulations, Zomato issued a firm denial. According to the company, an investigation initiated by an initial CCI order on April 4, 2022, had yet to yield any formal conclusions or negative findings against it. This information, disclosed in Swia BSE notice, highlighted that the CCI had issued no further directives since the inquiry commenced.

 

 

Zomato’s Company Secretary and Compliance Officer, Sandhya Sethia, provided additional context, explaining that the April 2022 ‘Prima Facie Order’ resulted in an investigation under the CCI’s Director General. Sethia stated that the CCI had initially raised concerns, particularly over Zomato’s platform practices, including listing preferences for restaurant partners and pricing parity across platforms.

 

Zomato assured stakeholders that its practices align with the Competition Act, 2002, and do not upset competition in the market. Sethia noted, in reference to a business article by The Economic Times that the report was “misleading”.  

Swiggy calls media report ‘misleading’ too

 

Meanwhile, Swiggy also called the media report 'misleading'. “Media reports of the Competition Commission of India's (CCI) investigation into Swiggy confuse the investigative process with the final outcome and are misleading,” the company said in a statement.

 

Swiggy stated that, based on the CCI's order dated April 5, 2022, the director general investigated specific aspects of its business conduct, and the inquiry and report of March 2024 represent only a preliminary step in an ongoing investigation, not a final decision, as some reports suggest. Swiggy clarified that it has disclosed all relevant details in the company’s public DRHP filing on September 26, 2024.

 

The company added that it has yet to receive confidential details of the findings from the CCI in order to respond to the DG's findings. Swiggy explained that once it submits its response and the CCI conducts a hearing, a decision will be issued on whether any competition law violations have taken place.  

Zomato reaffirms compliance and cooperation

 

In its Bombay Stock Exchange filing, Zomato stressed its transparency in business dealings and continued constructive engagement with the CCI, adding that there had been “no further reportable events” warranting disclosure under SEBI (Listing Obligations and Disclosure Requirements) Regulations of 2015.

 

The company reaffirmed its commitment to working with the CCI and considering any recommendations that may arise from the investigation. 

 

“We will continue to work closely with the Commission to explain why all our practices are in compliance with the Competition Act and that they do not have any adverse effect on competition in India,” it said.

 

This response came amid industry speculation that Zomato and Swiggy could be involved in unfair practices. While the initial inquiry raised questions around practices like preferential listings and price consistency, Zomato maintains that these approaches focus on customer satisfaction without compromising competitive standards.

 

What are the allegations against Zomato and Swiggy?

 

The antitrust investigation began in 2022 following a complaint by the National Restaurant Association of India, which claimed the platforms’ practices were detrimental to restaurants.

 

Both Swiggy and Zomato have significantly shaped India’s food delivery market, leveraging smartphone adoption and increased online ordering to offer a broad range of restaurant options. However, the CCI documents indicated that their requirement for price parity — preventing restaurants from offering lower prices on competing platforms — may have further restricted competition and squeezed restaurant profit margins.

 

As Swiggy approaches the final stages of bids for its $1.4 billion initial public offering, which would be India’s second-largest this year, both companies now face closer scrutiny. The CCI leadership is reviewing the investigation findings to determine potential penalties or adjustments to their business models.

 

Zomato’s stock opened 0.74 per cent lower on November 11 and was trading at Rs 246.97 on the BSE at 9.32 am.