Complaints of abuse of dominance and tie-in sales against Zomato dismissed: CCI

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Abuse of Dominant Position; Zomato CCI news;

Case Details: Mr. Rohit Arora v. Zomato Private Limited (now Zomato Limited)

Judiciary and Counsel Details

    • Ashok Kumar Gupta, Chairperson
    • Ms. Sangeeta Verma and Bhagwant Singh Bishnoi, Member

Facts of the Case

In the instant case, Information was filed by an Informant under Section 19(1)(a) of the Competition Act, 2002 (Act) against Zomato Private Limited (OP) alleging contravention of provisions of Sections 3(4) and 4 of the Act. The Informant is stated to be a consumer of Zomato for a long and has been ordering regularly from its platform since 2018.

The Informant alleged that Zomato abused its dominant position by raising food delivery charges and by charging unfair, discriminatory, and exorbitant delivery charges from its consumers. It was further alleged that Zomato vertically restrained restaurants from delivering food themselves and is restricting food delivery from unfavoured restaurants by not assigning delivery executives.

In order to support the complaint, the Informant mentioned three incidents:

First Incident: Zomato had canceled the order stating it could not deliver the order, as the customer was unavailable to collect the food at the mentioned address and your phone was unreachable. Since the restaurant had prepared your order and denied to refund the amount for this order

The Informant later checked the terms of service on the OP’s app and found that as per Term XIII, any cancellation will be treated as an authorization breach for which Zomato is entitled to levy liquidated damages which it may determine at its discretion. The imposition of such an arbitrary cancellation policy was alleged to be abusive conduct on the part of the OP.

Second Incident: The second incident was related to spillage of food, Zomato and replied that Zomato Valet has delivered perfect orders in the last week and he is rated 4.9 out of 5 stars. We’ll treat this mistake as an exception from his end and share feedback with him. According to the Informant, this amounted to an abuse of dominant position by Zomato.

Third Incident: This incident was related to the non-refund of money on the cancellation of order. Zomato refunded only 50% of the order amount citing that the restaurant had begun preparing the food ordered. The Informant compared the cancellation policy of Zomato with other platforms such as Swiggy, Talabat.com, Deliveroo, Food Panda, etc. to demonstrate that the cancellation policy of the former is abusive.

Zomato’s reply

In its reply, Zomato, at the outset, as regards the first incident, stated that, the Informant placed an order through Zomato, then directly contacted the delivery partner asking him to contact him on his landline number and not on his registered mobile number when delivering the order. When such instructions are communicated through Zomato, its customer service executives ensure that such instructions reach the delivery partner. But in the present circumstances, when the instructions were directly passed on to the delivery partner, it would have been unfair for Zomato to provide the Informant a full refund since the delivery partner had spent time, energy, and fuel to pick up and transport the order.

With regard to the second incident, Zomato had stated that its customer support executive asked the Informant to select the item that was spilled. However, the Informant did not proceed with the complaint and did not provide a photo of the spill which prima facie shows that the Informant was just interested in getting a quick refund, and when he realised that this will not happen, he did not proceed with the complaint and is now twisting the facts by stating that Zomato did not ask him to provide photographic evidence of the spill. As per Zomato, had it been a genuine case, the Informant should have raised the issue with the customer support team or contacted them through email, attaching photographic evidence of the spillage.

As regards the third incident, Zomato had refuted the Informant’s claim that he cancelled the order dated 30.10.2020 ‘within 30—40 seconds’. As per Zomato, the Informant had placed the order at 11.09 A.M. and had reached out for cancellation at 11.11 A.M., which was two minutes after placing the order. Even then, contrary to the Informant’s allegation, he was provided a full refund for the order, a fact which the Informant has wilfully and fraudulently failed to disclose.

CCI Held

CCI ruled that with respect to the three personal incidents of abuse alleged by the Informant, the Zomato sought to negate the same with evidence on record, which was not refuted by the Informant substantively, and thus, the Commission found no instance of abuse has been made out against the Zomato

The Commission observed that the Informant had delineated two separate relevant markets as online food ordering services provided by food aggregator apps in India and food delivery services in India, which Zomato had disputed. Based on the facts and circumstances of the case, the Commission believed that there exists no prima facie case of contravention of the provisions of the Act against the OP, and the Information filed is directed to be closed forthwith under Section 26(2) of the Act.

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