Leading industry body, National Restaurant Association of India (NRAI) on Monday said that it has approached the Competition Commission of India (CCI) against what it claimed to be “anti-competitive” practices of Zomato and Swiggy. It said that practices such as deep discounting, high commissions, data masking and violation of platform neutrality among others have been highlighted in the information filed with the CCI.

Keeping the interest of restaurants in mind and how they have been affected by the “inherently anti-competitive practices” of Zomato and Swiggy, the National Restaurant Association of India (NRAI) on July 1 filed information with the Competition Commission of India (CCI), it said in a statement. In its petition, NRAI has raised concerns regarding alleged practices of bundling of services, data masking and charging of exorbitant commissions by the aggregators. It has also pointed out to issues of deep discounting and claimed that restaurant partners are forced to give discounts to maintain appropriate listing. It has also alleged violation of platform neutrality, vertical integration and lack of transparency on the platforms. Issues regarding price parity agreements which restricts sellers from offering their goods at lower prices on other platforms and exclusivity of listed restaurants have also been raised.

Issues remain unresolved

Anurag Katriar, President of NRAI said that the restaurant body has been in constant dialogue with the food service aggregators over last 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,” he added.

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Emails sent to Zomato and Swiggy did not illicit an immediate response. NRAI’s move to approach the competition watchdog comes ahead of Zomato’s IPO, for which it received approval from SEBI on Monday.

NRAI has been at odds with the food aggregators since 2018. In 2019, hundreds of restaurant members of NRAI had decided to delist themselves from food aggregators, especially Zomato, in protest against deep discounting among other issues. More recently, NRAI launched the #OrderDirect campaign encouraging industry members to directly deliver to consumers flagging issues of high commissions and data masking by food aggregators. “During the pandemic, the magnitude of anti-competitive practices of Zomato, Swiggy have increased manifold and despite numerous discussions with them, these deep-funded platforms are not interested to alleviate the concerns of the restaurants. In fact, during the pandemic, due to onerous terms imposed, a lot of our partners had to shut shop,” NRAI added.