The Competition Commission of India (CCI), have said that e-commerce food delivery applications Zomato and Swiggy need to go through a thorough investigation due to multiple unfair practices. The Competition Commission of India is a government organization that regulates competition in the country. The organisation is responsible for maintaining free and fair competition between rival firms.
According to the CCI, Zomato and Swiggy need to undergo investigation due to various unethical practices. The staggered payment model, low delivery partner rates, obscene amounts of delivery fees and platform commissions, and the biased contracts are just a few of the reasons for the ordering of the investigation.
The organisation has asked the director of either company to organize a comprehensive inquiry on the accusations and revert back to them in two months.
The issue arose due to a complaint submitted by the National Restaurant Association of India (NRAI). The NRAI approached the CCI with various complaints on the two food delivery apps. The NRAI, accused the pair of not revealing data to restaurants, offering discounts not agreed upon by the restaurant and even being partial to some restaurants while others get lost in the mix.
The National Restaurant Association of India is a group consisting of hotels across India for better communication and operations. With a centralised body, restaurants across the nation can push for laws that favour them and even help each other have a steady growth. Currently, over 50,000 restaurants are officially affiliated with the organisation.
The organisation even went on to say that during the height of the coronavirus lockdown, the malpractices of the two delivery apps went up multifold even when they knew that business was down due to the lockdown. Many restaurants were backed in a corner and approached the NRAI as a last resort. The NRAI did contact representatives of Swiggy and Zomato to discuss the concerns that many restaurants face but the two apps paid no heed to them.
This forced the NRAI to contact the CCI as their final option as the pair never responded to the NRAI’s complaints and concerns. The CCI has now forced the rivals for a comprehensive report on the accusations and has even given them a deadline. If the pair decides not to heed to CCI’s ultimatum, the organisation will be forced to take a much more direct and stricter route. Afterall, it is the livelihood of thousands of restaurant owners and employees on the line.
