NRAI gives further evidence to CCI against food aggregators

The National Restaurant Association of India (NRAI) has submitted additional information with the Competition Commission of India (CCI), further highlighting what it claims are exorbitant commissions charged by online food delivery firms and flagging delayed payments as well as laying the burden of discounts on restaurant partners.

The move follows the restaurant body announcing that it had moved the competition watchdog against online food aggregators with evidence to back allegations of anticompetitive practices such as data masking and charging of exorbitant commissions by food aggregators Zomato and Swiggy on 1 July.

On 12 July, NRAI filed additional information along with evidence with CCI highlighting practices such as exorbitant commissions charged by Zomato and Swiggy in the range of 25-35% of the order value in 2020-21. It also raised concerns around delayed payments; apart from alleging that aggregators force restaurant partners to give discounts to maintain a prominent visibility of their listing.

It also highlighted the practice of price parity—there have been instances where some partners have been delisted from platform since they offered some better rates to consumers on other channels, it said.

This has shifted the entire cost burden on the restaurants and affected cash flows. Restaurants are running at a loss since they cannot meet their expenses, yet they had to rely on Zomato and Swiggy due to the pandemic curbs, NRAI added.

“NRAI believes that the evidence furnished before the CCI will further evidence the unfair business practices of Zomato and Swiggy and the authority will investigate the conduct of these aggregators,” it said in a statement.

Meanwhile, Zom-ato, which is set for a stock market listing, recently told reporters NRAI’s concerns against food aggregators were misplaced and that it is yet to receive an intimation from CCI. The company is committed to working and resolving differences that emerge with the restaurant body and the restaurant industry at large, the company’s top executives said last week while announcing the online food platform’s initial public offering plans.