CCI dismisses complaint against Eternal over Zomato food pricing

MUMBAI: Ordering online may cost extra, but the CCI says that’s the price of convenience, not competition gone cold. The Competition Commission of India (CCI) has dismissed a complaint against Eternal Ltd, the parent company of Zomato, ruling that there is no prima facie evidence of abuse of dominant position or anti-competitive conduct in the platform’s pricing practices.

The complaint, filed by an individual consumer, alleged that a food item purchased through Zomato was priced at Rs 198, compared with Rs 105 when bought directly from the same restaurant. The complainant argued that the difference stemmed from higher menu prices, delivery charges, platform fees and taxes, and further claimed that restaurants were compelled to inflate menu prices because of commissions charged by the platform, amounting to violations of Sections 3 and 4 of the Competition Act, 2002.

Rejecting the allegations, the Commission said it was inappropriate to directly compare prices on an online food delivery platform with those charged at a restaurant, as the two offerings are fundamentally different.

The regulator observed that online orders include additional services such as platform access and doorstep delivery, for which consumers knowingly pay. It also noted that restaurants are free to decide how they price their menus, including whether to factor platform commissions into listed prices.

The CCI added that consumers choosing online food delivery platforms do so with the understanding that convenience comes at an additional cost. Since restaurants and online delivery platforms operate under different business models, price differences between the two are neither unusual nor inherently anti-competitive.

The Commission also examined claims of “drip pricing”, under which charges are allegedly revealed gradually during the purchase process. It found that platform fees, delivery charges and taxes were linked to identifiable services provided during the transaction and were disclosed before the purchase was completed. Consumers, it noted, remain free to continue with or abandon an order until the final checkout stage.

Based on its assessment, the CCI concluded that there was no prima facie case of violations under Sections 3 or 4 of the Competition Act by Eternal Ltd, formerly known as Zomato Ltd, and ordered the matter to be closed.

The ruling reinforces the regulator’s view that higher prices on online delivery platforms, when linked to additional services and transparently disclosed, do not by themselves amount to anti-competitive conduct.