Karnataka High Court Grants Relief to Swiggy, Extends Stay on CCI Case

Swiggy's interim protection has been maintained by the Karnataka High Court. Despite raising concerns about relying on third-party comments without cross-examination, the HC has prolonged Swiggy's stay on proceedings before the Competition Commission of India (CCI) in an ongoing antitrust probe. Justice Sachin Shankar Magadum, while hearing Swiggy's appeal, said that the case needed further investigation.

Magadum  added that because of the Supreme Court's decision in CCI vs Schott Glass India, especially on the admissibility of testimony that had not been subjected to cross-examination. The court made the observation that in most cases, untested material cannot be presented as evidence against a party.

Why Swiggy and CCI Fighting this Legal Battle?

This disagreement began when Swiggy disputed the CCI's decision to prevent the cross-examination of witnesses whose remarks were included in the investigation record. The Commission has previously made it clear that these claims should not be considered in isolation but rather as part of a larger evaluation. Therefore, the CCI maintained, cross-examination was superfluous.

The High Court rejected the CCI's arguments and found that Swiggy had shown sufficient evidence to justify a preliminary injunction. So, until the next hearing on April 25, the Commission has ordered that no further procedures in the current matter be continued. The matter has been granted liberty to the CCI to file its statement of objections at the preliminary stage, and it has been classified as part-heard.

Why Only Swiggy Facing the Music?

Investigators discovered that meal delivery companies supposedly provided reduced commissions in return for exclusivity after a 2022 complaint from the National Restaurant Association of India (NRAI). It was also mentioned that Swiggy allegedly promises exclusive partners a rise in their business. To prevent the competition watchdog from continuing its investigation, Swiggy had petitioned the High Court. Based on concerns about the potential erosion of procedural protections, the food delivery firm additionally requested that HC prohibit CCI from disclosing sensitive information to industry groups.

This lawsuit is a piece of a larger antitrust investigation into meal delivery services, which has focused on concerns including platform neutrality, data practices, and market dominance. CCI is looking into an inquiry that found that Zomato and Swiggy broke antitrust laws by favouring certain brands and enforcing exclusive agreements with their restaurant partners. According to the court documents, the interim injunction, which was initially obtained on March 17, has been repeatedly extended on both March 24 and April 9 and will remain in effect until the next hearing on April 25.