NRAI files evidence with CCI against Zomato, Swiggy

New Delhi: Zomato and Swiggy are charging hefty commissions on every order, alleged The National Restaurant Association of India (NRAI) as it filed evidence with additional information before the Competition Commission of India (CCI) on Monday, as per a report by IANS.

The NRAI highlighted that both the food delivery firms charged commissions to the range of 25 to 35 per cent per order value in 2020-21.

NRAI said that there had been many instances when Zomato and Swiggy delayed their payments, affecting the entire cash flow of NRAI's partners.

For restaurants to maintain visibility in their platform, Swiggy and Zomato were forcing them to give discounts. It says that the firms shifted the entire cost burden to the restaurants.

It was on July 1, NRAI had filed information with CCI highlighting the anti-competitive practices such as bundling of services, data masking and exorbitant commissions, price parity agreements, deep discounting, which forces the restaurant partners to give discounts to maintain an appropriate listing, and exclusivity of listed restaurants. These practices had a debilitating effect on the restaurants and the entire ecosystem.

However, Zomato's promoters said that the NRAI's concerns are misplaced.

NRAI said that it has enormous support from restaurants in the ecosystem all over the country, which has come to the fore with more evidence that shows how the firms use their market power. When all public establishments were closed during the pandemic, and restaurants have to depend on these firms, they were imposed with harsh terms they had no choice but to accept. The anti-competitive practices combined with the lockdown due to pandemic is affecting its partners heavily. Many are subjected to extreme stress and are on the verge of closing as they are running at a loss and cannot meet their expenses. Also, they have to rely on Zomato and Swiggy due to the pandemic curbs, NRAI said.

NRAI further said that these firms are threatening to delist restaurants if they do not maintain price parity. Some were delisted from the platform for serving food for better rates through other channels.

NRAI concluded that it filed information with the CCI to ensure that its continued efforts to safeguard the food and beverage (F&B) industry will succeed so that a level playing field for each player in the marketplace is formed. It added that it is committed to its partners and will put best efforts with the CCI so that the practices of Zomato, Swiggy and similar firms would align to the benefit of the entire F&B industry.