Swiggy gets clean chit from CCI in unfair business practices complaint

Swiggy gets clean chit from CCI in unfair business practices complaint
Photo Credit: VCCircle
23 Jun, 2020

The Competition Commission of India (CCI) has dismissed an unfair business practice complaint against online food delivery platform Swiggy.

However, in a ruling issued last week, the competition watchdog directed Swiggy to provide sufficient disclosures on pricing to allay any “misgivings.”

According to the complaint, Swiggy, which is operated by Bundl Technologies, typically charges a commission on the total order bill amount, inclusive of GST (goods and services tax), from partner restaurants. At times, the platform allegedly also charges more based on a surge in delivery prices. It also claimed that the rates charged by Swiggy are much higher than the rates offered by the restaurants in their outlets, over and above the delivery charges.

Swiggy informed CCI that it operates only as an intermediary and the prices displayed on the platform are directly uploaded by its partner restaurants and it has no direct or indirect role in influencing the prices on its platform.

In the ruling, CCI said it may not be germane to define a precise relevant market and conduct further analysis. 

“Having been satisfied with the averments of Swiggy that it has no role to play in the pricing of the products offered by the partners on the platform, the Commission finds that no prima facie case of contravention of the provisions of Section 4 of the Act (abuse of dominant position) is made out against Swiggy in the instant matter,” it said.

It further elaborated that Swiggy does not select or modify the information contained in the transmission made through the platform, and thus, any discrepancy in the rates, is solely attributable to partners and not to it.

“In this regard, the Commission observes that it would be apposite for Swiggy to give sufficient disclosures on its platform that it is not involved in fixation of price of the products/ menus of the restaurants on its platform, so as to allay misgivings, if any, in the minds of any stakeholders including the consumers,” the order said.

Last week, the national restaurant association of India (NRAI) was reportedly in discussion with online food delivery platforms such as Swiggy and Zomato to change commission structure, reduce discounts and levy new fees for deliveries.