Competition regulator dismisses consumer complaint on 'abuse of dominance' by Zomato

The Competition Commission of India (CCI) on Thursday dismissed a complaint against Zomato parent Eternal, finding no prima facie case for abuse of market dominance by the food delivery app.

The complainant had accused Zomato of imposing unfair and discriminatory conditions upon consumers and restaurant partners.

This, he claimed, caused “appreciable adverse effect on competition and amounts to exploitative abuse of dominance through excessive commissions, unfair pricing practices and anti-competitive commercial arrangements”.


The complainant, an individual consumer named R Suresh, had alleged that a food item bought through Zomato cost him Rs 198, way above the Rs 105 when purchased directly from the same restaurant.

The stark difference in the prices, he alleged, is driven by inflated menu prices, delivery charges, platform fee and taxes.

Restaurants, he claimed, were forced to inflate menu prices due to commissions charged by Zomato, which is in breach of competition law provisions.

CCI observations

The regulator held that the price differential doesn’t suggest any abuse of market dominance, as selling food items through online platforms involves other services as well, including platform services and delivery services.

The platforms, being multi-sided in nature, charge platform fees from consumers to provide online food services. They also charge delivery fees from consumers for delivering food through third parties or their own delivery mechanism, the regulator said.

On the other hand, such entities charge commission from restaurant partners for selling their food through their platforms.

“A consumer who is not able to go to the restaurant to have food may avail services of online food platforms by paying additional charges including delivery charges, platform fee etc,” the regulator said.

“The business model of selling food items through restaurants and online food delivery services are different. So, the price of a food product varies in both the models,” it added.

On the allegation that Zomato has resorted to drip-pricing, the regulator said consumers still have the option to accept or reject the item until the last moment of placing order. “Thus, drip pricing does not raise any competition issue, as such,” it added.

“In view of the above, the Commission finds that no prima facie case of contravention of the provisions of Sections 3 or 4 of the Act is made out against the Opposite Party (Zomato),” the regulator said, closing the case.