Anti-Competitive Agreements In Food Delivery Platforms
Author: LawSphereX
Category: General Law
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ANTI-COMPETITIVE AGREEMENTS IN FOOD DELIVERY
PLATFORMS
Manasvi Rastogi, BBA LLB (Hons.), Symbiosis Law School, Pune
ABSTRACT
This research delves into the anti-competitive agreements prevalent in the Indian food delivery sector, with a special focus on dominant platforms such as Zomato and Swiggy. These companies hold an overwhelming majority of the market share, which has granted them the leverage to impose contractual terms that can distort fair competition. Central to the study are allegations levied by the National Restaurant Association of India, which accused these platforms of using practices like exclusivity clauses, price-parity or mostfavoured nation clauses, high commissions, and data masking, all of which potentially limit restaurant autonomy and consumer choice.
The Competition Commission of India’s investigation found credible evidence suggesting these contracts stifled rivalry, inflated final prices, and restricted the freedom of partner restaurants to negotiate terms or use multiple delivery aggregators. The paper situates these Indian developments within a broader international context, comparing local findings with regulatory trends in the European Union and United States. What emerges is a clear pattern: unchecked contractual constraints in digital platform markets can entrench monopolistic positions, to the detriment of both competitors and consumers. The research emphasizes that while food delivery apps offer clear efficiency benefits and convenience, their unchecked dominance risks reducing competition and driving up prices.
It further highlights the pressing need for policy innovation: from distinguishing between types of most-favoured nation clauses to mandating data sharing between platforms and partner restaurants in order to reduce dependency. Overall, the findings underscore the necessity of maintaining a careful balance between efficiency gains and market fairness. The study concludes that India’s competition laws must continue adapting, ensuring protection against exploitative practices in the platform economy while supporting innovation and consumer welfare. The discussion is especially timely as digital market power continues to concentrate and the debate over fair practices in the gig economy intensifies at home and abroad.
Introduction In India, food delivery platforms like Zomato and Swiggy dominate the sector by accounting for the bulk of online food ordering. While players like MagicPin and ONDC exist, they hold a comparatively smaller market. In the last decade, the competitive landscape has been redefined due to the rapid expansion of digital platforms. Within this, the food delivery platforms in particular have emerged as intermediaries that help connect millions of customers with restaurants on a daily basis. These platforms are popular because they offer variety, speed and convenience to the consumers. When such a large chunk of the population relies on it, maintenance of competition and a fair market becomes crucial. It must be ensured that economic power does not get concentrated in the hands of a few. Here, competition law plays an important role in curbing monopolistic practices.
While these food delivery platforms provide us with convenience, concerns about the fairness of their contracts with partner restaurants are on the rise. In July 2021, the National Restaurant Association of India (hereinafter “NRAI”) filed an information under Section 19(1)(a)1 of the Competition Act, 2002 before the Competition Commission of India (hereinafter “CCI”). It alleged that Zomato and Swiggy were engaging in anti-competitive practices like having exclusivity clauses in their contracts, price-parity restrictions by way of most-favoured nation (hereinafter “MFN”) clauses along with high commission charges. 2 Acting on this, in April 2022, the CCI directed its investigative arm, the Director General, to conduct a detailed probe.
3 More recently, in November 2024, media reports indicated that the investigation found evidence of antitrust breaches, suggesting that these contractual terms limited competition and consumer choice. 4 This paper explores how food delivery platforms structure their agreements, why such agreements raise antitrust concerns, and how Indian competition law is responding to these developments. By situating the Indian experience alongside international practice, the
1 The Competition Act, 2002, § 19(1)(a), No. 12, Acts of Parliament, 2002 (India).
2 In re National Restaurant Association of India v. Zomato Ltd. & Bundl Tech. Pvt. Ltd. (Swiggy), Case No. 16 of 2021.
3 CCI Directs Investigation Against Zomato and Swiggy, AZB & PARTNERS (Sep. 30, 2022),
https://www.azbpartners.com/bank/orders-under-section-261-of-the-act-cci-directs-investigation-againstzomato-and-swiggy/. 4 CCI probe finds Zomato, Swiggy breached antitrust laws, documents show, THE HINDU (Nov. 8, 2024, 04:02PM
IST),
https://www.thehindu.com/business/cci-probe-finds-zomato-swiggy-breached-antitrust-laws-documentsshow/article68844866.ece.
discussion aims to assess whether these contractual restrictions can be justified in the name of efficiency or whether they undermine the principles of fair competition. Rationale of the Study A study of anti-competitive agreements in the context of food delivery platforms is significant
because of its intersection with law, technology and consumer welfare. Zomato and Swiggy operate in a two-sided market; they serve consumers seeking convenience and restaurants seeking visibility. In 2024, Zomato and Swiggy collectively commanded over 90% of the market share, reflecting a near-perfect duopoly in the space. 5 This dominant position allows them to dictate contractual terms that may distort competition. The 2021 complaint6 alleged that these platforms imposed exclusivity agreements, price-parity clauses, high commissions, and engaged in practices such as data masking. Therefore, the investigation initiated by the CCI against these platforms demonstrates that the issue is not merely speculative but grounded in actual market practices.
The study is significant because it engages with two overlapping dimensions: first, the adequacy of Section 3 of the Competition Act7 in addressing modern platform practices; and second, the broader question of how Indian competition law aligns with global enforcement trends. Regulatory actions in the European Union against Amazon8 and Booking. com,9 and in the United States against Uber Eats,10 demonstrate that India’s challenges are part of a wider global debate on safeguarding competition in digital markets. 5 Shrankhala Verma, India’s Food Delivery Industry: A Rising Global Force Fueled by Innovation and Demand, INDUS FOOD (May 9, 2025), https://indusfood. co. in/article/indias-food-delivery/.
6 Supra note 2.
7 The Competition Act, 2002, § 3, No. 12, Acts of Parliament, 2002 (India).
8 Antitrust: Commission sends Statement of Objections to Amazon for the use of non-public independent seller data and opens second investigation into its e-commerce business practices, EUROPEAN COMMISSION PRESS RELEASE (Nov. 10, 2020), https://ec.europa.eu/commission/presscorner/detail/en/ip_20_2077. 9 Booking.com’s parent company is officially a gatekeeper, EU monopoly watchdog says, FORTUNE (May 13, 2024, 10:18 AM EDT), https://fortune.com/europe/2024/05/13/booking-european-commission-antitrust-monopolycore-platform-service/.
10 Seema Meena, Manasvi Shah, Devanshi Gotecha, Uber vs. DoorDash: Monopoly or Market Mayhem?,
MONDAQ (Feb. 26, 2025), https://www.mondaq.com/india/antitrust-eu-competition/1589344/uber-vs-doordashmonopoly-or-marketmayhem#:~:text=Uber%20Technologies%20filed%20a%20lawsuit,signing%20exclusive%20contracts%20with %20them.
Research Questions It is understood that certain practices adopted by food delivery platforms fall within the ambit of anti-competitive agreements under Section 3 of the Competition Act and this distorts the fair competition in the digital marketplace. Therefore, this research is guided by the following questions:
1. Do exclusivity and price-parity clauses imposed by food delivery platforms result in
appreciable adverse effect on competition?
2. To what extent do these agreements harm consumer welfare and restaurant autonomy
in the platform economy? Literature Review Anshuman Sakle and Nandini Pahari11 have examined the rise of digital and e-commerce markets and how it has transformed the competition dynamics in India. They argue that by exploiting network and price transparency, these multi-sided platforms have encouraged manufacturers to impose vertical restraints such as resale price maintenance and exclusivity agreements. These restraints distort intra-brand competition and raise novel regulatory challenges. They also highlight that such practices fall under the ambit of anti-competitive agreements under Section 3(4) read with Section 3(1) of the Competition Act, 2002 and that scrutiny under Section 4 may be attracted if the conduct is unilateral. They conclude by saying that sector-specific rules are essential for addressing complexities like algorithms and crossborder sales. Reshma G and Dr.
PKVS Rama Rao12 point towards the dominance of Swiggy and Zomato and argue that such a collective dominance has not been adequately addressed by the Competition Act. They state that these two companies together control most of India’a food delivery market. While Section 3(4) deals with anti-competitive agreements, Section 4 does not clearly cover situations where two firms exercise joint power. They explore the role of 11 Anshuman Sakle, Nandini Pahari, The Interaction between Competition Law & Digital and Ecommerce Markets in India, Vol 16 Issue 2 The Indian Journal of Law and Technology 18, 18-37 (2020).
12 Reshma G, Dr. PKVS Rama Rao, Collective Dominance in Multi-Sided Platforms: A Legal and Economic
Analysis of India's Food Delivery Sector, Vol 8 Issue 1 Indian Journal of Law and Legal Research 4096, 4069-
4082 (2025).
exclusivity, network effects, bundling and data concentration in strengthening their market position. They further suggest that competition law must be expanded in order to capture the features of such multi-sided platforms. Anuradha Jha and Tanvi Sharma13 have extensively explored India’s online food delivery system, which includes platforms such as Zomato, Swiggy, MagicPin, etc. They have tried to see how these players distort fair market competition through a range of practices. They point out that these platforms misuse dominant position by offering deeply discounted, unsustainable prices to drive out small players, pushing restaurants to source from in-house cloud kitchens, and compromising platform neutrality.
Furthermore, they talk about the asymmetry present in the information and the existence of one-sided contracts related to search rankings, parity clauses and even mandatory discount participation. They state that even the restaurant autonomy and the customer’s choices are affected by such practices. Thereby, they recommend introducing rules to enhance transparency in data, discount policies, and contract terms. Research Gaps While the existing literature has closely examined food delivery platforms through the lens of vertical restraints, collective dominance, and misuse of bargaining power, the focus remains largely on broad competition law principles. Not a lot of study has been done into how specific contractual terms, such as exclusivity and price-parity clauses, directly cause an appreciable adverse effect on competition (hereinafter “AAEC”).
There is a lack of sufficient analysis on the impact of these agreements on consumer welfare and restaurant autonomy within India’s platform economy. Methodology This research adopts a doctrinal method whereby reliance has been placed on statutes, judicial decisions and scholarly articles in order to examine and understand the anti-competitive agreements that take place in the food delivery ecosystem. A key reference point is the CCI’s investigation into Zomato and Swiggy, initiated after complaints by the Federation of Hotel & Restaurant Associations of India (hereinafter “FHRAI”) and NRAI, which directly highlighted 13 Anuradha Jha, Tanvi Sharma, Online E Commerce - An Aid or A Disruption in the Free Market Economy – A Case Study of Online Food Delivery Platforms in India vis a vis The Competition Act, 2002, Vol 8 Issue 6 IJCRT 4840, 4840-4859 (2020).
concerns over restaurant autonomy and consumer choice. Policy reports, academic literature, and comparative perspectives from jurisdictions such as the EU and US are also used to understand how regulators elsewhere address similar issues in platform markets. The approach is not only interpretative but also evaluative. Case Analysis In the case of NRAI v. Zomato and Swiggy,14 allegations were made against these platforms that they have been using vertical restraints on restaurants. These vertical agreements are covered under Section 3(4) of the Competition Act, 200215 wherein tie-in arrangements, exclusive supply/distribution, refusal to deal, and resale price maintenance are included. These agreements are usually between entities at different stages of the supply chain and may cause appreciable adverse effect on competition.
16 In April 2022, the CCI issued a prima facie order under Section 26(1)17 directing the Director General to investigate. 18 The CCI filtered eight buckets of allegations and identified three that warranted a closer probe: conflicts of interest linked to cloud-kitchen partnerships and private labels, exclusivity arrangements tied to incentives or minimum guarantees, and wide priceparity clauses. 19 This was viewed with caution as the CCI believed that it was capable of raising entry barriers and dulling competition on commission and price, thereby harming consumers and limiting the choice of restaurants. With respect to cloud kitchens and private labels, the CCI recorded that platform revenue interests and minimum guarantees could create incentives to divert traffic to affiliated brands, thus undermining platform neutrality.
It also flagged a “conflict-of-interest situation” that merited detailed scrutiny of how listings and visibility were being shaped. 20
14 Supra note 2.
15 The Competition Act, 2002, § 3(4), No. 12, Acts of Parliament, 2002 (India).
Dinoo Muthappa, Dhruv Dikshit, India: Vertical Restraints,
GCR
(March 25, 2022), https://globalcompetitionreview.com/review/the-asia-pacific-antitrust-review/2022/article/india-verticalrestraints#:~:text=Vertical%20agreements%20are%20covered%20under,whom%20they%20are%20sold;%20an d.
17 The Competition Act, 2002, § 26(1), No. 12, Acts of Parliament, 2002 (India).
18 Supra note 2.
19 Supra note 2, ¶ 76, 85–86.
20 M M Sharma, CCI Directs Investigation Against Zomato and Swiggy for Alleged Anti-Competitive Practices,
LEXOLOGY
(Apr. 7, 2022), https://www.lexology.com/library/detail.aspx?g=8fddb8c9-e108-4ad0-932e- 718933a74dfa.
With respect to exclusivity, the CCI noted that there was material to suggest that restaurants were nudged into exclusive arrangements through reduced commissions or guarantees, potentially foreclosing rival aggregators and weakening multi-homing by restaurants. It asked the DG to examine how exclusivity interacts with platform neutrality in practice. 21 Furthermore, with respect to price parity clauses, the CCI highlighted the risk that wide MFNs remove incentives for platforms to compete on commission, inflate final prices, and deter lowcost entrants, which are basic AAEC concerns in every two-sided market.
22 The DG probe later produced documents that, according to media reports in November 2024,23 indicated Zomato had used lower commission offers tied to exclusivity while Swiggy made growth guarantees to select partners; both firms were reported to have imposed pricing and discount restrictions that could reduce competitive pressure. 24 These investigative findings, if upheld by the Commission, would squarely engage Section 3(1)25 read with Section 3(4) and potentially Section 426 remedies. 27 Findings The investigation into Zomato and Swiggy by the CCI illustrates how exclusivity and price parity clauses may trigger scrutiny under anti-competitive agreements and abuse of dominant position.
While these platforms contend that such clauses ensure consistency and consumer trust, their actual effect is to foreclose competition by preventing restaurants from engaging with rival aggregators or offering differentiated pricing. This weakens the market contestability and establishes the dominance of leading platforms, which Section 4 explicitly seeks to prevent. The consequences for restaurant independence and consumer welfare are profound. Price parity clauses price-fix across platforms, denying consumers authentic discounts, while restaurants
21 Supra note 2, ¶ 48.
22 Supra note 2, ¶ 85.
23 CCI probe finds Zomato, Swiggy violating competition norms, THE NEW INDIAN EXPRESS (Nov. 9, 2024,
4:06PM
IST),
https://www.newindianexpress.com/business/2024/Nov/09/cci-probe-finds-zomato-swiggyviolating-competition-norms-2.
24 Aditya Kalra, India’s Probe Finds Zomato, Swiggy Breached Antitrust Laws, Documents Show, REUTERS
(Nov. 8, 2024), https://www.reuters.com/world/india/indias-probe-finds-zomato-swiggy-breached-antitrustlaws-documents-show-2024-11-08/.
25 The Competition Act, 2002, § 3(1), No. 12, Acts of Parliament, 2002 (India).
26 The Competition Act, 2002, § 4, No. 12, Acts of Parliament, 2002 (India).
27 Sohini Chowdhury, CCI Orders Probe Against Zomato And Swiggy On Restaurants Association’s Complaint Of Anti-Competitive Practices, LIVELAW (Apr. 5, 2022), https://www.livelaw.in/news-updates/cci-orders-probedetermine-conduct-zomato-swiggy-anti-competitive-195865.
lose the freedom to test dynamic pricing or establish their own channels of interaction. These constraints shift the bargaining equilibrium, with significant weight of leverage falling heavily in the hands of aggregators. In the EU, it was held by the Court of Justice that parity clauses were not justified by efficiency claims and threatened competition across digital markets.28 In the USA, the FTC’s action against Amazon similarly emphasized how contractual restraints that inflate consumer prices and foreclose competition amount to an unlawful exercise of dominance.29 Together, these approaches reinforce the need for Indian competition law to balance efficiency claims with fairness in digital markets. Suggestions
1. Hybrid Price Parity Regulation
The CCI must distinguish between wide and narrow MFNs, prohibiting the former and permitting the latter. By way of this targeted approach, EU has been balancing efficiency benefits along with restaurant autonomy.
2. Data Sharing with Restaurants
Online food delivery platforms must be required to anonymously share consumer data with the restaurants so that the dependency is reduced. This will help in improving bargaining power and even mitigate the anti-competitive effects of exclusivity clauses. Conclusion The Indian competition regime, by invoking Section 26 to initiate investigations, demonstrates its willingness to scrutinise platform practices in light of evolving market realities. However, the challenge lies in balancing efficiency justifications with fairness to smaller market participants. Comparative experience from the EU and US shows that unchecked contractual
28 De Brauw Blackstone Westbroek N.V., Price Parity Clauses In Two-Sided Markets: Case C-264/23
Booking.com, MONDAQ (March 7, 2025), https://www.mondaq.com/hotels-hospitality/1594126/price-parityclauses-in-two-sided-markets-case-c-26423-bookingcom. 29 Victoria Graham, FTC Sues Amazon for Illegally Maintaining Monopoly Power, FEDERAL TRADE COMMISSION (Sep. 26, 2023), https://www.ftc.gov/news-events/news/press-releases/2023/09/ftc-sues-amazon-illegallymaintaining-monopoly-power.
restrictions in digital markets often consolidate market power to the detriment of rivals and consumers. The research illustrates how exclusivity obligations, price-parity clauses, and control over consumer data can shift bargaining power heavily towards platforms, raising questions under Sections 3 and 4 of the Competition Act, 2002. Such practices not only risk creating an appreciable adverse effect on competition but also restrict the autonomy of restaurants and limit consumer welfare through reduced choice and higher prices. Ultimately, food delivery platforms must be regulated in a manner that preserves their efficiency benefits while preventing exploitative conditions. This balance is crucial if India’s platform economy is to remain both innovative and competitive.