No Domino’s Pizza on Zomato, Swiggy? Know What Company Has Said

Domino’s Pizza India franchise may stop taking orders from popular food delivery apps Zomato and Swiggy. This disclosure was made by Jubilant FoodWorks, Domino’s holding company, in a confidential filing with the Competition Commission of India (CCI).

The company, according to a Reuters report, said in a letter to the CCI on July 19, “In the event of an increase in commission rates, Jubilant will consider moving more of its business from online restaurant platforms to its internal ordering system.”

The CCI had solicited comments from Domino’s India franchise and several other restaurants as part of an investigation into alleged anti-competitive practices by Zomato and Swiggy. As part of the response, Domino’s India also said that in July about 27 percent of its business in India was generated through online platforms, including its mobile app and website.

The CCI launched its investigation into Zomato and Swiggy in April after the National Restaurant Association of India (NRAI) alleged that these apps had preferential treatment, excessive commissions, and other anticompetitive practices.

The restaurant organization also claimed that the commissions charged by Zomato and Swiggy were in the 20-30 percent range, where they were “not viable.”

According to the Reuters report, a senior industry executive with direct knowledge, who declined to be named, said the Zomato and Swiggy committees were a concern for Domino’s and many other restaurants. “If the commissions are further increased, they will lead to a profit squeeze for companies and will simply be passed on to consumers.”

The CCI probe in Zomato, Swiggy

The CCI ordered an investigation into alleged unfair trade practices by food delivery platforms Zomato and Swiggy in April, after the NRAI raised concerns about the platforms’ dealings with restaurant partners. It had alleged that the companies had offered their facilities to some brands for additional fees or rental commissions.

The NRAI had urged the CCI to investigate the companies for violations of platform neutrality by prioritizing exclusive contractors. It also claimed that Zomato had used consumer data to build cloud kitchens.

The competition watchdog said in its decision: “The Commission considers that a prima facie conflict of interest has arisen in the present case, both with regard to Swiggy and with Zomato, due to the presence of commercial interests in the downstream market, which can get in the way of acting as neutral platforms.”

In response, Zomato said in a regulatory filing that it will explain to the competition watchdog that it is in compliance with relevant laws and said it intends to “immediately comply with all recommendations given to us by the Hon’ble Commission.” … We will continue to work closely with the Hon’ble Commission to assist them in their investigation and to explain to the regulator why all of our practices comply with competition laws and have no adverse effect on competition in India.”

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