Domino’s Pizza India franchise may stop taking orders on popular food delivery apps Zomato and Swiggy. This disclosure was made by Domino’s holding company Jubilant FoodWorks in a confidential filing with the Competition Commission of India (CCI).
The company, according to a Reuters report, in a letter to the CCI on July 19, said: “In the event of an increase in commission rates, Jubilant will consider moving more of its business from online dining platforms to the internal control system. ”
The CCI had requested responses from the 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 around 27% of its business in India was generated from online platforms, including its mobile app and website.
The CCI launched the investigation into Zomato and Swiggy in April after the National Restaurant Association of India (NRAI) alleged that the apps were subject to preferential treatment, exorbitant commissions and other anti-competitive practices.
The restaurant organization also alleged that the commissions charged by Zomato and Swiggy were in the range of 20-30%, which was “unsustainable”.
According to the Reuters report, a senior industry executive with direct knowledge, who declined to be named, said commissions from Zomato and Swiggy were a concern for Domino’s and many other restaurants. “If commissions are increased further, they will compress corporate profits and will simply be passed on to consumers.”
The CCI probe in Zomato, Swiggy
In April, the ICC ordered an investigation into alleged unfair business practices by food delivery platforms Zomato and Swiggy, after the NRAI raised concerns about the relationships between the platforms and partner restaurants. He had alleged that the companies offered their facilities to certain brands for an additional fee or rental commission.
The NRAI had urged the CCI to investigate companies for violating platform neutrality by prioritizing exclusive contractors. He also alleged that Zomato used consumer data to build cloud kitchens.
The competition watchdog said in its order: “The Commission is of the opinion that a prima facie situation of conflict of interest has arisen in the present case, both with regard to Swiggy and Zomato, due to the presence of commercial interest in the downstream market, which may prevent them from acting as neutral platforms.
In response to this, Zomato, in a regulatory filing, said it would explain to the competition watchdog that it was in compliance with applicable laws and said it intended “to promptly 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 explain to the regulator why all our practices comply with the laws on competition and have no adverse effect on competition in India.
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