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Domino’s Pizza may not be available on Zomato and Swiggy; Reason here…

The Domino’s Pizza India franchise may no longer accept orders through popular food delivery apps Zomato and Swiggy. This disclosure was made in a confidential filing with the Competition Commission of India by Domino’s holding company Jubilant FoodWorks (CCI). According to Reuters, the company stated in a letter to the CCI on July 19 that ‘if commission rates increase, Jubilant will consider shifting more of its businesses from online restaurant platforms to the in-house ordering system’.

The CCI had sought responses from the Domino’s India franchise and several other restaurants as part of an investigation into Zomato and Swiggy’s alleged anti-competitive practises. As part of its response, Domino’s India stated that online platforms, including its mobile app and website, accounted for approximately 27% of its business in India in July. The CCI launched the investigation into Zomato and Swiggy in April after the National Restaurant Association of India (NRAI) accused these apps of preferential treatment, exorbitant commissions, and other anti-competitive practises.

The restaurant association also claimed that commissions charged by Zomato and Swiggy were in the 20-30% range, which was ‘unviable’. According to Reuters, a senior industry executive with direct knowledge who declined to be identified said Zomato’s and Swiggy’s commissions were a source of concern for Domino’s and many other restaurants. ‘Any further increase in commissions will result in a squeeze on business profits, which will simply be passed on to consumers’.

CCI Investigates Zomato and Swiggy
Following the NRAI’s concerns about the platforms’ dealings with restaurant partners, the CCI ordered an investigation into alleged unfair business practises of food delivery platforms Zomato and Swiggy in April. It was claimed that the companies offered their facilities to certain brands in exchange for extra fees or rental commissions. The NRAI had urged the CCI to look into the companies for violating platform neutrality by giving exclusive contractors preference. It was also claimed that Zomato had built cloud kitchens using consumer data.

In its order, the competition watchdog stated, ‘The Commission is of the opinion that prima facie a conflict of interest situation 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, Zomato stated in a regulatory filing that it will explain to the competition watchdog that it is in compliance with relevant laws and that it intends to ‘promptly comply with any recommendations given to us by the Hon’ble Commission… We will continue to work closely with the Hon’ble Commission to assist them with their investigation and to explain to the regulator why all of our practises are in compliance with competition laws and have no adverse effect on competition in India’.

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