Delivery Fees, Food Charges And Platform Fees Charged By Zomato Are Not Unfair Or Discriminatory: CCI

Brief Facts:

Mr. Lalit Wadher (“Informant”) filed an information in the Competition Commission of India (“Commission”) against Zomato Ltd. (“Opposite Party/OP”) alleging anti-competitive practices and abuse of dominant position.

The Informant is a senior citizen of India, and the OP is a food delivery company, which operates through mobile application (“app”) for online ordering of food from various restaurants and eateries.

The app allows users to request a dish of their choice, shows the restaurants who have the requested dish, displays the selected restaurant's menu and price, enables payment through various methods, and provides an estimated delivery time after payment.The food is delivered to the consumer by a delivery partner assigned.

Contentions:

The Informant has alleged that the business practices of OP are against the interest of consumers as the prices charged for food are generally 20-30% higher than the prices of the restaurant. It has further alleged that after the item has been ordered and delivered, the affiliated restaurants do not mention the price on the food items. As per the informant this prevents the consumer from knowing as to how much he/she is being overcharged by the OP.

Along with the high price of the food, the OP also charges platform fee, delivery charges, packing charges, donation and tips. As per the informant, he could not find any method to remove these charges.

The informant has also alleged that the OP is operating as a duopoly with another similar company and has no other Competition, which is why it is charging the consumer with undue, excessive and monopolistic charges. Further the informant alleged, that the platform fee has been increased from Rs.5.00 to Rs.6.00, however no improvement has been made in the app for the consumer.

It was further alleged that when any complaint regarding the food has to be made, the OP's customer care connects the call to the restaurant from which the food is ordered and does not take any responsibility of the same.

The informant states that since the OP delivers the food items to the consumer and receives the payment, it becomes a seller. So, as per the Sale of the Goods Act, 1930 a seller is responsible for disclosure, warranty, quantity, fitness & delivery of the product.

Findings:

The commission on perusal of the allegations by the informant noted that the levy of various kinds of charges viz. food charges, platform fees, delivery fees, tip etc., by OP; was of the view that these charges do not appear to be unfair and discriminatory in nature.

The commission further noted that with respect to the payment of donation and tips, there is an option easily accessible and visible to opt out from the same. The issue of edibility of food, non-disclosure of food prices on packaging, do not raise any competition concern.

The commission closed the information as it found no prima facie case that there is no abuse of dominant position by OP which means that there is no contravention of the provisions of Section 4 of the Competition Act and held that no investigation is required to be Conducted.

Case Title: Mr. Lalit Wadher And Zomato Ltd.

Case Number: 27 of 2024

Judgement Date: 06.03.2025

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