CCI Dismisses Complaint Against Zomato; Holds Delivery, Platform and Food Charges Not Unfair or Discriminatory
Pranav B Prem
The Competition Commission of India (CCI) bench comprising Ms. Ravneet Kaur (Chairperson), Mr. Anil Aggarwal (Member), Ms. Sweta Kakkad (Member) and Mr. Deepak Anurag (Member) has held that the levy of food charges, platform fees, delivery fees, and other charges by Zomato Ltd. does not amount to unfair or discriminatory pricing, and no case of abuse of dominant position is made out under Section 4 of the Competition Act, 2002.
Brief Facts
The information was filed by Mr. Lalit Wadher, a senior citizen, under Section 19(1)(a) of the Competition Act, 2002, alleging anti-competitive conduct by Zomato Ltd. (Opposite Party/OP). The Informant stated that Zomato operates a mobile application-based platform for ordering food online from various restaurants. As per the information, upon ordering a dish, the app shows a list of restaurants offering that dish, provides menu and pricing, enables payment, and assigns delivery to a partner after confirmation.
The Informant claimed to have used the app on three occasions and alleged that the prices charged through the platform were 20–30% higher than those offered by restaurants directly. He further alleged that Zomato-affiliated restaurants do not display prices on the packaging, making it difficult for consumers to verify overpricing.
It was also submitted that Zomato charges platform fees, delivery charges, packing charges, donations, and tips, and there was no clear method to opt out of some of these charges on the app. According to the Informant, the platform fee had been increased from ₹5.00 to ₹6.00 without any corresponding improvement in services or user experience.
The Informant additionally alleged that Zomato redirects customer complaints to restaurants without taking responsibility and argued that Zomato, as a seller under the Sale of Goods Act, 1930, must bear responsibilities for quality and disclosure. It was further claimed that Zomato operates in a duopoly, enabling it to charge “monopolistic” rates to consumers.
Observations and Findings
After examining the information and documents, the Commission observed that the Informant had not referred to any specific violation of the Act but raised general concerns about pricing and platform practices. However, the Commission considered the allegations under the scope of Section 4, which deals with abuse of dominant position.
The Commission held that:
The levy of food charges, platform fees, delivery fees, and tips by Zomato did not appear unfair or discriminatory in nature.
The Informant’s claim regarding inability to opt out of tips or donations was not supported, as the Commission noted that the option to not pay a tip was visible and easily accessible on the platform.
Allegations relating to edibility of food, lack of price tags on packaging, and non-disclosure of timing of payments to restaurants did not raise any competition concern.
There was no data or evidence provided by the Informant to support the allegation that Zomato was operating as a duopoly along with another similar company.
Given the above, the Commission concluded that there was no need to delineate the precise relevant market, and that no prima facie case under Section 4 of the Act had been made out.
Decision
The CCI ordered closure of the case under Section 26(2) of the Competition Act, 2002, stating: "The Commission finds that no prima facie case of contravention of the provisions of Section 4 of the Act is made out against the OP. Accordingly, the Information is ordered to be closed forthwith."
Cause Title: Mr. Lalit Wadher And Zomato Ltd.
Case No: Case No. 27 of 2024
Coram: Ms. Ravneet Kaur [Chairperson], Mr. Anil Agrawal [Member], Ms. Sweta Kakkad [Member], Mr. Deepak Anurag [Member]
[Read/Download order]
