Competition Commission Probe Finds Swiggy, Zomato Breached Antitrust Laws: Report

Swiggy Ltd. and Zomato Ltd.—the country's top two food delivery aggregators—breached antitrust laws, an investigation by the Competition Commission of India revealed, Reuters reported on Friday.

Swiggy offered growth opportunities to restaurants that listed exclusively on its platform, whereas Zomato rolled out lower commissions for clients who entered into "exclusivity contracts" with it, the news agency reported, citing a document related to the CCI probe that is yet to be made public.

These exclusivity pacts "prevent the market from becoming more competitive", the CCI's investigation unit reportedly stated in the document.

The development could not be independently confirmed. Swiggy and Zomato were yet to issue a statement in response to the report.

The investigation against Swiggy and Zomato for alleged violation of the competition laws was initiated in 2022 following a complaint by the National Restaurant Association of India.

The report on the CCI probe comes amid the initial public offering launched by Swiggy. The company's Rs 11,327-crore IPO—the second largest issue in India this year—has been subscribed over 1.5 times.

In line with the confidentiality norms, CCI's documents related to the investigation are not made public. The findings have only been shared with Swiggy, Zomato, and the complainant, Reuters reported.

The CCI is reviewing its probe findings, the report said, adding that the antitrust commission may levy a penalty on the two food delivery firms or order them to change their business practices. The final decision could be taken in several weeks, it noted.

Zomato and Swiggy, in recent years, have significantly impacted the way Indians order food. Both companies have tens of thousands of restaurants and other food outlets listed on their delivery platforms.

In fiscal 2024, Swiggy posted a 36% jump in operating revenue to Rs 11,247.3 crore. In comparison, its listed rival Zomato reported a 71% jump in its topline to Rs 12,961 crore.