Indian antitrust regulators from the Competition Commission of India (CCI) are looking into food delivery companies Zomato and Swiggy over allegations of the companies not being as neutral as they should be, Reuters wrote Monday (April 4).
The report noted that the delivery firms may have breached platform neutrality and provided priority to exclusive contractors.
The probe comes after the National Restaurant Association of India (NRAI) asked the CCI to look into the companies over the contractor concerns. The NRAI, which represents over 500,000 restarants in India, also said Zomato and Swiggy misused consumer data, charging excessive rates for commissions and more.
“A conflict of interest situation has arisen in the present case, both with regard to Swiggy as well as Zomato … which may come in the way of them acting as neutral platforms,” the CCI said in an order.
The CCI said it had already “found merit” in looking into the neutrality concern, though the report noted it didn’t see any merit in delayed payments, one-sided clauses and high commission as “being linked to commission.”
Neither company responded to a request for comment by press time.
PYMNTS wrote that Zomato will be merging with Blinkit, which will come with a loan to Blinkit for the startup’s capital needs.
Read more: India’s Delivery Services Zomato, Blinkit to Merge, Report Says
Zomato got a 9% stake in Blinkit last August for almost $68 million, and earlier this year, Zomato said it planned to invest around $400 million for the Indian quick commerce market for the next two years.
Blinkit rebranded itself from Grofers in late 2021, and at the time, its CEO promised faster deliveries for various items. The company works in delivery and has been competing with big firms like Amazon and Flipkart.
Zomato reportedly had poor third-quarter results and its shares fell by around 9% in February of this year. The report said there was a 1.7% uptick in sequential gross order value as pandemic restrictions eased and in-person dining reemerged.
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