NRAI writes to CCI, alleging Swiggy and Zomato’s unfair practices hurt restaurants

Online food ordering and delivery platforms Zomato and Swiggy have become heavily popular among consumers in the country, owing to the ease of ordering and getting food delivered through these services. So high is their popularity that one often tends to forget how their business tactics might be having an adverse effect on the conventional food outlets like restaurants and fast food joints. As such, in order to remind the government about the plight faced by restaurant owners and businesses, the National Restaurant Association of India (NRAI) has written to the Competition Commission of India (CCI), touching upon how the two startups have had an adverse effect on restaurants especially during the pandemic.

As per the statement, NRAI claims that Swiggy and Zomato have engaged in one too many anti-competitive practices, from bundling of services, to offering large discounts. Other complaints include data masking, high commissions, violation of neutrality by giving favour to certain partners, often through exclusive listing, as well as vertical listing and lack of transparency.

Despite the rising concerns and deep injuries to business among restaurants, Zomato and Swiggy have taken no concrete steps to work towards becoming friendlier to their partners, adds NRAI.

This isn’t the first time that the Association has sounded the alarm about unfair trade practices that the two unicorn startups have indulged in, over the years. Back in 2019, it had written another appeal to the CCI. One thing that is worth noting is that despite a gap of two years, the concerns and demands in the two appeals are strikingly similar. Even in 2019, restaurants had complained of lack of transparency and deep discounting, as well as general abuse of power and monopoly. Seems like things haven’t changed, after all.

This time around, the Association has said that its members remain wary of the food aggregating platforms, despite a series of meetings having been conducted in the past 1.5 years to reach a settlement agreed upon by both parties.

Anurag Katriar, President of the NRAI, has said, “We have been in constant dialogue with the food service aggregators over the last 15-18 months to resolve critical issues impacting the sector. However, despite all our efforts, we have unfortunately not been able to resolve them with the aggregators. The needle hasn’t moved much on these issues. We have therefore approached the CCI now to look into the matter and investigate them thoroughly.”

Meanwhile, the group has also been urging its partners to stop relying on food aggregator services, and instead, go back to the conventional ways of ordering and getting food delivered, through its “Order Direct” campaign. Doing so, they say, will protect businesses from having to pay up large sums as commissions.

Source: https://thetechportal.com/2021/07/05/nrai-writes-to-cci-alleging-swiggy-and-zomatos-unfair-practices-hurt-restaurants/

Department of Information Technologies: https://www.ibu.edu.ba/department-of-information-technologies/