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Zomato says will work closely with CCI, comply with recommendations

FPJ Web Desk | Updated on: Tuesday, April 05, 2022, 04:36 PM IST

On Monday, CCI ordered a detailed probe against food delivery platforms, Zomato and Swiggy, for alleged unfair business practices with respect to their dealings with restaurant partners../ Representational image |
On Monday, CCI ordered a detailed probe against food delivery platforms, Zomato and Swiggy, for alleged unfair business practices with respect to their dealings with restaurant partners../ Representational image |
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Food aggregator Zomato said on Tuesday it will continue to work closely with the Competition Commission of India (CCI) to assist the regulator with their investigation and explain to them why all of its business practices are in compliance with competition laws.

Zomato claimed its business practices have no "adverse effect" on competition in India.

"We intend to promptly comply with any recommendations given to us by the Hon'ble Commission," it said in a regulatory filing to the exchanges.

The statement from the company comes a day after CCI ordered a detailed probe against food delivery platforms, Zomato and Swiggy, for alleged unfair business practices with respect to their dealings with restaurant partners.

"We intend to promptly comply with any recommendations given to us by the Commission," Zomato said, according to a report in LiveMint.

The order has come on a complaint filed by the National Restaurant Association of India (NRAI).

The watchdog's probe arm - Director General (DG) - will investigate the case.

The regulator said that "prima facie there exists a conflict of interest situation, warranting a detailed scrutiny into its impact on the overall competition between the restaurant partners (RPs) vis-à-vis the private brands or entities which the platforms may be incentivised to favour".

Both Zomato and Swiggy operate as major intermediary platforms in the food delivery space, underscoring their market power and ability to adversely as well as appreciably affect the level playing field, the CCI said.

It also noted that preferential treatment accorded to the RPs in which these platforms have an equity or revenue interest can create barriers for the existing RPs to compete on fair terms.

"Such preferential treatment can be through various ways given the platform's control over different aspects that influence competition on them, including control over deliveries, search ranking etc. which can only be examined appropriately in an investigation," it said.

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Published on: Tuesday, April 05, 2022, 04:36 PM IST