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Zomato shares decline as CCI probes alleged unfair business practices

The two online food delivery platforms are allegedly involved in delayed payment cycles and exorbitant commissions.

New Delhi : Shares of food-aggregator Zomato declined on Tuesday after the Competition Commission of India ordered a thorough investigation into the conduct of online food delivery platforms Zomato and Swiggy.

The two online food delivery platforms are allegedly involved in delayed payment cycles and exorbitant commissions.

At 3.26 p.m., the shares traded at Rs 83.75, down 2.9 per cent.

Following a complaint from the National Restaurant Association of India (NRAI), the CCI said that it is of the view that there exists a prima facie case with respect to some of the conduct of Zomato and Swiggy, “which requires an investigation by the Director General (DG), to determine whether the conduct of platforms have resulted in contravention of the provisions”.

The NRAI represents over 50,000 restaurant operators across the country. The NRAI had alleged that the commissions that are charged from restaurants are “unviable” and “are to the tune of 20 per cent to 30 per cent, which are extremely exorbitant”.

Post the CCI’s order, Zomato said in a regulatory filing to the exchanges that it will continue to work closely with the Commission to assist them with their investigation and
explain to the regulator why all of its practices are in compliance with competition laws and do not have any adverse effect on competition in India.

“We intend to promptly comply with any recommendations given to us by the Hon’ble Commission,” it further said in the filing.

Since the start of the calendar year 2022, the shares of the company fell 41 per cent.

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