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The Competition Commission of India (CCI) has dismissed a complaint against Eternal Ltd, the parent company of Zomato and Blinkit, after finding no prima facie evidence of abuse of dominance or anti-competitive conduct. The complaint alleged that food prices on Zomato were significantly higher than restaurant prices due to inflated menu rates, platform fees and commissions. The regulator held that online food delivery involves additional services, making direct price comparisons inappropriate, and noted that consumers knowingly pay for the convenience offered by digital delivery platforms.
The Competition Commission of India (CCI) has dismissed a complaint filed against Eternal Ltd, the parent company of Zomato and Blinkit, after concluding that there is no prima facie evidence of abuse of dominant position or violation of competition law in relation to pricing and platform fees on Zomato.
The case arose after an individual consumer claimed that a food item purchased through Zomato was priced at INR 198, while the same item was available directly from the restaurant for INR 105. According to the complaint, the higher price resulted from increased menu rates, delivery charges, platform fees and applicable taxes.
The complainant also alleged that restaurants were forced to increase menu prices because of commissions charged by Zomato. It was argued that this practice violated Sections 3 and 4 of the Competition Act, 2002, which deal with anti-competitive agreements and abuse of dominant position, respectively.
After examining the matter, the CCI rejected these allegations. The regulator observed that online food delivery includes additional services such as technology infrastructure, order management, payment processing and doorstep delivery, making direct comparisons with prices charged by restaurants for dine-in or takeaway purchases inappropriate.
The Commission further noted that food delivery platforms charge consumers for delivery and platform-related services, while restaurants may choose to factor commissions into their menu prices. It added that consumers who place orders through online food delivery platforms are aware that they are paying additional charges in return for the convenience of the service. It also observed that the business models followed by restaurants and online food delivery platforms are fundamentally different.
Addressing the allegation of drip pricing, the CCI stated that charges such as platform fees, delivery fees and taxes relate to additional services offered during the transaction. The regulator noted that these charges are displayed before an order is placed and consumers remain free to proceed with or cancel the order until the final stage of checkout. Therefore, it held that drip pricing, in this case, does not raise any competition-related concerns.
Based on its assessment, the Commission concluded that no prima facie case of violation of Sections 3 or 4 of the Competition Act had been established against Eternal, formerly known as Zomato Ltd.
The order comes as India's online food delivery sector continues to face scrutiny over pricing practices, commissions and platform fees. In recent years, the CCI has examined several issues involving digital platforms and online marketplaces to assess whether their business practices affect market competition or consumer choice. However, the regulator has consistently maintained that intervention is warranted only where there is sufficient evidence of anti-competitive conduct.
Source PTI
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