Zomato, Swiggy rebuffs CCI antitrust violation charges, says report ‘misleading, …no conclusive’

Zomato has dismissed recent reports of an antitrust investigation by the Competition Commission of India (CCI) into its business practices, calling the claims “misleading.” In a statement issued on November 10, Zomato clarified that while the CCI had initiated a preliminary investigation in April 2022, no conclusive findings or orders have been issued against it. Zomato emphasised its compliance with Indian competition laws and reaffirmed its commitment to supporting the investigation and addressing any queries.

Zomato share price closed in the red, down 2.37 per cent at ₹249.10, on November 8, 2024, on the BSE. The company enjoys a market capitalisation of ₹2,20,113.28 crore, per BSE data.

Media reports

In response to recent media reports claiming that Zomato and Swiggy have breached antitrust laws, Zomato Limited has come forward with a strong rebuttal. The company clarified that an investigation prompted by an initial CCI order on April 4, 2022, has not led to any formal conclusions or adverse findings against the company. Zomato disclosed this information in a notice to the BSE, underscoring that the CCI has issued no further orders since the investigation began.

Zomato’s Company Secretary and Compliance Officer, Sandhya Sethia, addressed the matter, stating that the original April 2022 “Prima Facie Order” led to an inquiry directed by the CCI’s Director General. The CCI had previously outlined its concerns, particularly regarding Zomato's platform practices, such as listing preferences for restaurant partners and pricing consistency across platforms. However, Zomato reassured stakeholders that its practices fully comply with the Competition Act, 2002, and do not harm market competition.

“The aforementioned news article is misleading,” Sethia stated, emphasizing that Zomato has been transparent in its dealings and has continued to engage with the Commission constructively. The company underscored that there have been “no further reportable events” that would require an additional regulatory disclosure under the SEBI (Listing Obligations and Disclosure Requirements) Regulations of 2015.

Meanwhile, Swiggy's spokesperson told Mint, “Media reports of the Competition Commission of India's (CCI) investigation into Swiggy confuse the investigative process with the final outcome and are misleading. Based on the order of the CCI dated April 5, 2022, the Director General investigated certain aspects of the conduct of our business and its inquiry and report of March 2024 is a preliminary step in an ongoing investigation by the CCI, and not a final decision as some reports suggest. We have disclosed all the details of the matter in the company’s Public filing of the DRHP filed on September 26, 2024.”

“Swiggy is yet to receive the confidential details of the findings from the CCI for filing a response to the DG's finding. Once Swiggy submits its response and CCI conducts a hearing on the matter, CCI will pass its decision on whether any competition law violations have occurred,” the spokesperson further added.

Currently it’s at a preliminary stage and no final decision or order has been issued regarding Swiggy's practices since 2022. Swiggy is fully cooperating with the investigation and is committed to complying with the extant laws of the country.

Zomato assured stakeholders of its dedication to cooperating with the CCI and addressing any recommendations that may emerge from the investigation. 

This clarification followed the recent buzz in the industry, fueled by claims that Zomato and Swiggy might have engaged in unfair market practices. Although the initial investigation raised questions about practices such as preferential listings and pricing parity, Zomato maintains that these measures aim to deliver customer satisfaction without compromising competition standards.

For now, the CCI investigation remains ongoing, and Zomato’s public statement reflects its proactive approach to regulatory scrutiny.