An investigation by India’s antitrust body found food delivery giants Zomato and SoftBank-backed Swiggy breached competition laws, with their business practices favouring select restaurants listed on their platforms, documents show.

Zomato entered into “exclusivity contracts” with partners in return for lower commissions, while Swiggy guaranteed business growth to certain players if they listed exclusively on its platform, according to non-public documents prepared by the Competition Commission of India (CCI).

Exclusivity arrangements between Swiggy, Zomato and their respective restaurant partners “prevent the market from becoming more competitive,” the CCI’s investigation arm noted in its findings reviewed by Reuters on Friday.

The antitrust investigation against Swiggy and its top rival Zomato began in 2022 after a complaint by National Restaurant Association of India about the impact on food outlets of alleged anti-competitive practices of the platforms.

The CCI documents are not public, in line with its confidentiality rules, and were shared with Swiggy, Zomato and the complainant restaurant group in March 2024. Their findings have not been previously reported.

Zomato declined to comment, while Swiggy and the CCI did not respond to Reuters queries.

Shares in Zomato fell three percent after the Reuters report, from being flat in earlier trade.

The CCI case is mentioned as one of the “internal risks” in Swiggy’s IPO prospectus, which says “any breach of the provisions of Competition Act, may attract substantial monetary penalties.”

The CCI report noted that Swiggy told investigators the “Swiggy Exclusive” program was phased out in 2023, but the company “is planning to launch similar program (Swiggy Grow) in non-metropolitan cities.”

Food delivery giants Swiggy and Zomato have in recent years reshaped how Indians order food, as hundreds of thousands of outlets listed on their apps just when smartphone use, and online ordering, both grew rapidly.

Swiggy, which on Friday is closing bids for its $1.4 billion (roughly Rs. 11,811 crore) IPO – India’s second biggest this year, and Zomato both in recent years also pushed restaurants to maintain a parity on prices, directly reducing competition in the market by preventing restaurants offering lower prices on other online platforms, the CCI documents stated.

Zomato was found to have imposed pricing and discount restrictions on restaurant partners, and in some cases included a “penal provision” if the outlet failed to comply.

Some of Swiggy’s partner restaurants were “threatened that their rankings will be pushed down, if they do not maintain price parity,” the CCI’s investigation arm noted.

The next, and final phase, of the CCI case is a decision by the CCI leadership which is still reviewing the investigation findings to decide on any penalty or order changes to Swiggy’s and Zomato’s business practices.

That decision could take several weeks, and the companies still have the option of contesting the investigation findings with the CCI.

Zomato, which listed in 2021, has seen its shares more than triple to a valuation of about $27 billion amid rising demand. Swiggy is valuing itself at $11.3 billion in its IPO.

Macquarie Capital estimates Swiggy’s food order values in 2024-25 will be $3.3 billion, roughly 25% below Zomato’s.

Both are now diversifying fast into quick commerce where groceries are delivered in as little as 10 minutes.

India’s biggest group of retail distributors has asked the antitrust authority to investigate quick commerce businesses of Zomato, Swiggy and another rival Zepto for alleged predatory pricing, Reuters reported last month.

© Thomson Reuters 2024

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)

An investigation by India’s antitrust body found food delivery giants Zomato and SoftBank-backed Swiggy breached competition laws, with their business practices favouring select restaurants listed on their platforms, documents show.

Zomato entered into “exclusivity contracts” with partners in return for lower commissions, while Swiggy guaranteed business growth to certain players if they listed exclusively on its platform, according to non-public documents prepared by the Competition Commission of India (CCI).

Exclusivity arrangements between Swiggy, Zomato and their respective restaurant partners “prevent the market from becoming more competitive,” the CCI’s investigation arm noted in its findings reviewed by Reuters on Friday.

The antitrust investigation against Swiggy and its top rival Zomato began in 2022 after a complaint by National Restaurant Association of India about the impact on food outlets of alleged anti-competitive practices of the platforms.

The CCI documents are not public, in line with its confidentiality rules, and were shared with Swiggy, Zomato and the complainant restaurant group in March 2024. Their findings have not been previously reported.

Zomato declined to comment, while Swiggy and the CCI did not respond to Reuters queries.

Shares in Zomato fell three percent after the Reuters report, from being flat in earlier trade.

The CCI case is mentioned as one of the “internal risks” in Swiggy’s IPO prospectus, which says “any breach of the provisions of Competition Act, may attract substantial monetary penalties.”

The CCI report noted that Swiggy told investigators the “Swiggy Exclusive” program was phased out in 2023, but the company “is planning to launch similar program (Swiggy Grow) in non-metropolitan cities.”

Food delivery giants Swiggy and Zomato have in recent years reshaped how Indians order food, as hundreds of thousands of outlets listed on their apps just when smartphone use, and online ordering, both grew rapidly.

Swiggy, which on Friday is closing bids for its $1.4 billion (roughly Rs. 11,811 crore) IPO – India’s second biggest this year, and Zomato both in recent years also pushed restaurants to maintain a parity on prices, directly reducing competition in the market by preventing restaurants offering lower prices on other online platforms, the CCI documents stated.

Zomato was found to have imposed pricing and discount restrictions on restaurant partners, and in some cases included a “penal provision” if the outlet failed to comply.

Some of Swiggy’s partner restaurants were “threatened that their rankings will be pushed down, if they do not maintain price parity,” the CCI’s investigation arm noted.

The next, and final phase, of the CCI case is a decision by the CCI leadership which is still reviewing the investigation findings to decide on any penalty or order changes to Swiggy’s and Zomato’s business practices.

That decision could take several weeks, and the companies still have the option of contesting the investigation findings with the CCI.

Zomato, which listed in 2021, has seen its shares more than triple to a valuation of about $27 billion amid rising demand. Swiggy is valuing itself at $11.3 billion in its IPO.

Macquarie Capital estimates Swiggy’s food order values in 2024-25 will be $3.3 billion, roughly 25% below Zomato’s.

Both are now diversifying fast into quick commerce where groceries are delivered in as little as 10 minutes.

India’s biggest group of retail distributors has asked the antitrust authority to investigate quick commerce businesses of Zomato, Swiggy and another rival Zepto for alleged predatory pricing, Reuters reported last month.

© Thomson Reuters 2024

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)

India’s financial crime agency has raided offices of some sellers operating Amazon and Walmart-owned Flipkart in an investigation into alleged violations of foreign investment rules, two government sources said on Thursday.

The searches come weeks after Reuters reported India’s antitrust body had found the two companies and their sellers violated competition laws by giving preference to select sellers on their platforms. Both companies have maintained they comply with Indian laws.

One senior government source said raids were being carried out in New Delhi, Mumbai, and Bengaluru, but did not give names of sellers whose offices were being raided.

“The raids on sellers of Amazon and Flipkart is a part of ED’s probe … for alleged violations of foreign exchange laws,” said the first government source with direct knowledge.

Amazon and Flipkart did not immediately respond to requests for comment. A representative of the financial crime agency said he had no immediate comment.

The raids are the latest setback for Amazon and Flipkart, which count India as a key growth market where e-commerce sales are rapidly rising.

The Enforcement Directorate agency has been investigating both e-commerce giants for years for allegedly bypassing foreign investment laws that strictly regulate multi-brand retail and restrict such companies to operating a marketplace for sellers.

The first government source on Thursday said it was conducting the latest searches on the observations of the antitrust body in its recently concluded investigation of the two companies.

Those Amazon and Flipkart antitrust investigation reports from August, which are not public but have been seen by Reuters, say the platforms “had end-to-end control over the inventory and the sellers are just name lending enterprises.”

A Reuters investigation in 2021, based on internal Amazon papers, showed the company exerted significant control over the inventory of some of the biggest sellers, even though Indian laws prohibit foreign players from holding inventory of products.

India’s commerce minister in August publicly slammed Amazon, saying its investments in India have often been used to cover its business losses, adding that such losses “smell of predatory pricing.”

© Thomson Reuters 2024

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)

A federal judge in California has granted Google’s request to temporarily pause his order directing the Alphabet unit to overhaul its Android app store Play by Nov. 1 to give consumers more choice over how they download software.

San Francisco-based U.S. District Judge James Donato made the decision on Friday as part of an antitrust lawsuit against Google by “Fortnite” maker Epic Games. Google argued that Donato’s Oct. 7 injunction would harm the company and introduce “serious safety, security and privacy risks into the Android ecosystem.”

Donato delayed the injunction to allow the 9th U.S. Circuit Court of Appeals to consider Google’s separate request to pause the judge’s order.

Donato denied Google’s separate request to pause the order for the duration of its broader appeal in the case.

“We’re pleased with the District Court’s decision to temporarily pause the implementation of dangerous remedies demanded by Epic, as the Court of Appeal considers our request to further pause the remedies while we appeal,” Google said in a statement.

Epic in a statement called Donato’s ruling a procedural step, and said the court “made it clear that Google’s appeal is meritless and rejected their request to delay opening up Android devices to competition while the appeal is ongoing.”

Epic accused Google of using “fearmongering and unsubstantiated security threats to protect their control over Android devices and continue extracting exorbitant fees.”

In the Epic Games lawsuit, a jury last year found that Google illegally monopolized how consumers download apps on Android devices and how they pay for in-app transactions. The judge, in his order, embraced many of the steps recommended by Epic in light of the jury’s decision.

The order required Google to allow users to download competing third-party Android app platforms or stores in Play and to allow the use of competing in-app payment methods. It also barred Google from making payments to device makers to preinstall its app store and from sharing revenue generated from the Play store with other app distributors.

Google has already appealed the jury’s antitrust findings to the 9th Circuit.

Google has not presented its antitrust arguments to the appeals court. It previously has said that it cannot be considered a monopolist because Play and Apple’s App Store are direct competitors, and that Donato’s injunction would unlawfully force Google to do business with rivals.

© Thomson Reuters 2024

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)

A federal judge in California has granted Google’s request to temporarily pause his order directing the Alphabet unit to overhaul its Android app store Play by Nov. 1 to give consumers more choice over how they download software.

San Francisco-based U.S. District Judge James Donato made the decision on Friday as part of an antitrust lawsuit against Google by “Fortnite” maker Epic Games. Google argued that Donato’s Oct. 7 injunction would harm the company and introduce “serious safety, security and privacy risks into the Android ecosystem.”

Donato delayed the injunction to allow the 9th U.S. Circuit Court of Appeals to consider Google’s separate request to pause the judge’s order.

Donato denied Google’s separate request to pause the order for the duration of its broader appeal in the case.

“We’re pleased with the District Court’s decision to temporarily pause the implementation of dangerous remedies demanded by Epic, as the Court of Appeal considers our request to further pause the remedies while we appeal,” Google said in a statement.

Epic in a statement called Donato’s ruling a procedural step, and said the court “made it clear that Google’s appeal is meritless and rejected their request to delay opening up Android devices to competition while the appeal is ongoing.”

Epic accused Google of using “fearmongering and unsubstantiated security threats to protect their control over Android devices and continue extracting exorbitant fees.”

In the Epic Games lawsuit, a jury last year found that Google illegally monopolized how consumers download apps on Android devices and how they pay for in-app transactions. The judge, in his order, embraced many of the steps recommended by Epic in light of the jury’s decision.

The order required Google to allow users to download competing third-party Android app platforms or stores in Play and to allow the use of competing in-app payment methods. It also barred Google from making payments to device makers to preinstall its app store and from sharing revenue generated from the Play store with other app distributors.

Google has already appealed the jury’s antitrust findings to the 9th Circuit.

Google has not presented its antitrust arguments to the appeals court. It previously has said that it cannot be considered a monopolist because Play and Apple’s App Store are direct competitors, and that Donato’s injunction would unlawfully force Google to do business with rivals.

© Thomson Reuters 2024

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)