2025 (7) TMI 1145 - CCI - Law of Competition

CCI dismisses case against food delivery platform for alleged abuse of dominant position under Section 4

Mr. Lalit Wadher Versus Zomato Ltd., Gurugram

CCI dismissed allegations against a food delivery platform accused of abusing dominant position under Section 4 of the Competition Act, 2002. The ... Anti-competitive practices - abuse of dominant position - section 19(1)(a) of the Competition Act, 2002 - HELD THAT:- The Commission has perused the Information along with the attached documents. The Informant appears to be aggrieved by the conduct of OP which inter alia includes charging of inflated prices for food on OP’s platform, charging of platform and other fees, not ensuring edibility of the delivered food, non-disclosure of timing of payment to restaurants, and thus earning profits from treasury operations. OP is also stated to be operating as a duopoly along with a similar company without any other competition. The Commission notes that the Informant has made an allegation that OP is running as duopoly along with a similar company without any other competition in the market, but has not provided any data/evidence in this regard. On perusal of the allegations, which largely pertain to levy of various kinds of charges viz. food charges, platform fees, delivery fees, tip etc., by OP; the Commission is of the view that these do not appear to be unfair and discriminatory in nature. Further, the Informant also appears to be aggrieved that he could not find any option to opt out from default setting of payment of tips. The Commission noted that tip is not mandatory and there is option to not pay the same which is easily visible. In addition, the Informant has also made allegations related to edibility of the delivered food, non- disclosure of food prices as per restaurants’ menus on the packaging and of timing of payments to restaurants by the OP. The Commission is of the view that in the facts of the present case these allegations do not appear to raise any competition concern. The Commission finds that no prima facie case of contravention of the provisions of Section 4 of the Act is made out against the OP. Accordingly, the Information is ordered to be closed forthwith in terms of the provisions contained in Section 26(2) of the Act - The Secretary is directed to communicate the decision of the Commission to the Informant, accordingly. ISSUES: Whether the conduct of the mobile application-based food delivery company amounts to abuse of dominant position under Section 4 of the Competition Act, 2002.Whether the levying of various charges such as platform fees, delivery charges, packing charges, donations, and tips by the food delivery app constitutes unfair or discriminatory pricing.Whether the absence of price disclosure on food packaging and non-disclosure of timing of payments to restaurants by the app raises competition concerns.Whether the food delivery app's business practices violate consumer protection principles under the Sale of Goods Act, 1930 by failing to assume seller responsibilities.Whether the alleged duopolistic market structure with another similar company results in monopolistic charges and lack of competition. RULINGS / HOLDINGS: On the issue of abuse of dominant position, the Commission found 'no prima facie case of contravention of the provisions of Section 4 of the Act' against the food delivery app based on the facts and allegations presented.The levying of platform fees, delivery charges, packing charges, donations, and tips were held not to be 'unfair and discriminatory in nature', and the Commission noted that tips are not mandatory and an option to opt out is available and visible.Allegations regarding non-disclosure of prices on food packaging and timing of payments to restaurants were considered 'not appear[ing] to raise any competition concern' in the present facts.The claim that the app should bear seller responsibilities under the Sale of Goods Act, 1930 was not accepted as a matter within the Competition Act's scope and did not form a basis for competition law violation.The allegation of a duopoly leading to monopolistic charges was not supported by any data or evidence, and thus did not substantiate a competition law violation. RATIONALE: The Commission applied the framework of the Competition Act, 2002, specifically Section 4 relating to abuse of dominant position, to assess the conduct of the food delivery app.In absence of specific allegations or evidence demonstrating dominance or abuse, and given the nature of charges levied, the Commission did not find sufficient grounds to proceed.The Commission noted the importance of evidence in substantiating market dominance and abuse, and found the Informant's allegations to be largely unsubstantiated or outside the ambit of competition law.No delineation of the relevant market was considered necessary due to the lack of prima facie evidence of dominance or anti-competitive conduct.The decision reflects adherence to established principles requiring concrete evidence for claims of abuse of dominance and unfair pricing under the Competition Act.