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Delhi High Court Alerts Zomato and CCI in Antitrust Probe
In an ongoing antitrust investigation, the Delhi High Court has served notices to food delivery platform Zomato and the Competition Commission of India (CCI). This legal action stems from a plea filed by the National Restaurant Association of India (NRAI), which challenges its exclusion from a crucial confidentiality ring established for the probe.
NRAI Challenges Exclusion from Confidentiality Ring
The confidentiality ring was formed in 2022 to safeguard sensitive information while ensuring fair legal representation among all parties involved in the antitrust investigation. Initially granted access, the NRAI was subsequently excluded by the CCI in October 2024.
The restaurant association argues this exclusion significantly impairs its ability to effectively present its case. The NRAI has requested a judicial review of Zomato’s claims regarding confidentiality.
Zomato Defends NRAI Removal in Court
Representing Zomato in court, legal counsel defended the removal of the NRAI, asserting that the association represents businesses that are in competition with each other. Justice Sachin Datta, who is adjudicating the case, has combined the NRAI’s plea with a similar case involving Swiggy. The next court hearing is scheduled for April 23.
Background: CCI Ruling and NRAI’s Antitrust Complaint
This legal challenge occurs alongside a recent CCI ruling that concluded Zomato’s platform practices and delivery fees did not constitute an abuse of a dominant market position. This ruling marks a significant development for Zomato, which has faced regulatory scrutiny for nearly two years.
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NRAI’s Initial Grievances
The NRAI’s original complaint alleged that food technology platforms were engaging in anticompetitive practices. These practices included:
- Deep discounting
- Bundled services
- High commission rates
- Delayed payments to restaurants
- Imposition of one-sided contractual terms
Limited Access and Subsequent Exclusion
In April 2024, the NRAI was initially granted restricted access to the CCI’s investigation findings under the parameters of the confidentiality ring. However, Zomato and Swiggy challenged this decision at the Karnataka High Court, arguing potential “irreparable commercial harm” from the disclosure of commercially sensitive information.
Following a court decision in June 2024, the CCI reassessed the situation and ultimately excluded the NRAI from the confidentiality ring in October 2024, prompting the association to seek legal recourse at the Delhi High Court.
Growing Tensions Between Restaurants and Food Delivery Platforms
Earlier in the year, the NRAI had also considered initiating separate legal actions against these platforms, underscoring the increasing friction between the restaurant sector and major food delivery services like Zomato and Swiggy. The current court action is the latest development in this ongoing dispute.