Delhi HC Notifies Zomato and CCI of NRAI's Exclusion in Antitrust Investigation

As part of an ongoing antitrust probe against the foodtech giant, the Delhi High Court (HC) has sent notice to Zomato and the Competition Commission of India (CCI).

According to reports, the HC made the rulings at a hearing on a plea against the National Restaurant Association of India's (NRAI) exclusion from the confidential ring during the investigation. The HC was also urged by the NRAI to examine the company's confidentiality claims.

What is Confidential Ring?

The confidential ring was first introduced in 2022 and gives parties access to private documents or information about other parties in an inquiry so they can better defend themselves. The confidentiality ring aids regulators in quickly resolving complaints, subject to specific riders. Exclusion from the ring inhibits a petitioner’s capacity to make a defence.

It is important to remember that in October 2024, the competition watchdog removed the NRAI from the ring after it had been first included. At the hearing on 21 April, Zomato's lawyer allegedly argued that the NRAI should not be included in the confidential ring because it included companies that are competitors of the foodtech juggernaut.

Issue to be Further Heard on 23 April

The NRAI's claim against Zomato was combined with a similar suit against Swiggy by the High Court bench, which was presided over by Justice Sachin Datta.

In November of last year, the HC also sent out a notice on the Swiggy case. At its upcoming hearing on April 23, the HC will now consider both cases together. This news broke on the same day that the CCI upheld Zomato's platform fees and delivery costs, ruling that they do not constitute an abuse of control.

The most recent development occurs five months after a report stated both Zomato and rival Swiggy were found guilty internally by the competition commission. According to CCI, both businesses have limited market competition by favouring particular restaurant partners, in violation of competition regulations.

CCI Putting a Strict Scanner of Zomato and Swiggy

After NRAI filed a complaint in 2021, the CCI conducted an examination involving the two companies for over two years before issuing its antitrust decision. In its lawsuit, the industry association had said that the foodtech platforms participated in anticompetitive practices such as deep-discounting methods, bundling of services, exorbitant fees, delayed payment cycles and imposition of one-sided terms.

As part of the confidential ring, the watchdog had already granted the NRAI restricted access to the antitrust report in April 2024. In the Karnataka High Court (HC), Zomato and Swiggy later contested the CCI's order, claiming that the disclosures may cause the two businesses "irreparable commercial harm" even in the presence of confidentiality protections.

The Karnataka High Court then ordered the watchdog to re-examine its ruling in June 2024, which cleared the path for the October 2024 verdict that barred the NRAI from the confidentiality ring. The restaurant body moved the Delhi HC as a result of this development.