CCI junks complaint against Eternal over Zomato platform fee, pricing practices
The complainant had alleged that the difference arose due to inflated menu prices, delivery charges, platform fee and taxes.
Fair trade regulator CCI on Thursday dismissed a complaint against Eternal, holding that no prima facie case of abuse of dominance was made out in relation to platform fees and pricing on its food delivery app, Zomato.
Eternal Ltd owns food delivery platform Zomato and quick commerce entity Blinkit.
The case stemmed from a complaint by an individual consumer, who alleged that a food item purchased through Zomato cost Rs 198, against Rs 105 when bought directly from the same restaurant.
The complainant had alleged that the difference arose due to inflated menu prices, delivery charges, platform fee and taxes.
The complaint also alleged that restaurants were compelled to inflate menu prices due to commissions charged by Zomato, thereby flouting the provisions of Section 3 and 4 of the Competition Act, 2002.
Sections 3 and 4 pertain to anti-competitive agreements and abuse of dominant position, respectively.
Rejecting the allegations, the commission observed that online food delivery involves additional services such as platform and delivery services, making it inappropriate to compare prices with direct restaurant purchases.
It noted that platforms charge consumers for delivery and platform services while restaurants may pass on commissions through menu prices, CCI said in the order.
The regulator further said consumers who opt for online food delivery knowingly pay additional charges for the convenience of the service and that the business models of restaurants and online food delivery platforms are different.
On the allegation of 'drip pricing', CCI said additional charges such as platform fees, delivery fees, and taxes relate to additional services provided, and consumers retain the option to accept or reject the order until the final stage of checkout.
"Thus, drip pricing does not raise any competition issue, as such," the anti-trust watchdog said.
Accordingly, the regulator said, "Commission finds that no prima facie case of contravention of the provisions of Sections 3 or 4 of the Act is made out against the opposite party (Eternal, formerly Zomato Ltd)."