CCI Dismisses Complaint Against Eternal Over Zomato Pricing
CCI dismisses complaint against Eternal over Zomato pricing, finding no prima facie anti-competitive conduct.
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The Competition Commission of India (CCI) has rejected a complaint against Zomato parent company Eternal Ltd, holding that there was no prima facie case of abuse of dominant position or anti-competitive conduct under the Competition Act, 2002.
The complaint filed by an individual consumer stated that a food item ordered through Zomato was priced at ₹198 against ₹105 if ordered directly from the same restaurant. The complainant said the higher price was due to higher menu prices, delivery charges, platform fees and taxes, and alleged that restaurants had to inflate prices because of the commissions charged by the platform.
The complaint further stated that these practices were in contravention to Sections 3 and 4 of the Competition Act relating to anti-competitive agreements and abuse of dominant position.
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CCI Ruling:
The CCI rejected the allegations saying it was not correct to compare prices on an online food delivery platform with prices in a real restaurant as online orders also involved additional services such as access to the platform and delivery.
The regulator said that restaurants are free to decide whether or not they want to include platform commissions in their menu prices and that consumers choosing online delivery are aware of the extra charges for the convenience of such services.
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The Commission also looked into allegations of ‘drip pricing’ and found that platform fees, delivery charges and taxes relate to services supplied during the transaction. It noted that shoppers can review the total cost and either go ahead or abandon their purchase before the final checkout.
After its findings, the CCI held that there was no prima facie violation of Sections 3 or 4 of the Competition Act by Eternal, formerly known as Zomato Ltd and closed the matter.
