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NRAI Accuses Swiggy, Zomato of Power Abuse in Food Apps
The National Restaurant Association of India (NRAI) has raised allegations against food delivery giants Swiggy and Zomato, accusing them of abusing their dominant market positions. The complaints focus on the platforms’ promotion of their private label food brands at the expense of other restaurants listed on their apps.
Allegations of Unfair Practices
The NRAI claims that Swiggy and Zomato are leveraging their dominance in the food delivery market to push their own private label brands, disadvantaging other restaurants. “It is disheartening to see how platform neutrality is being compromised,” the association said in a statement.
The complaint further alleges that the platforms prioritize their private labels in search results, offer them greater visibility, and deploy aggressive pricing strategies to capture market share, leaving independent restaurants at a competitive disadvantage.
Platform Neutrality in Question
According to the NRAI, platform neutrality—a key aspect of fair competition—is being eroded by these practices. The association has called for an immediate review of the algorithms and policies employed by these platforms to ensure a level playing field for all participants.
“Private label brands should compete fairly in the marketplace, and platforms must not misuse their dominant position to favor their own interests,” the NRAI emphasized.
Swiggy and Zomato Respond
While Swiggy and Zomato have yet to issue detailed statements regarding the allegations, they have previously maintained that private label brands are a legitimate business strategy. Both companies have argued that their labels meet consumer demand while contributing to their overall profitability.
However, the NRAI contends that the lack of transparency in how these brands are promoted on the platforms creates an uneven playing field, potentially harming the restaurant ecosystem.
Potential Regulatory Action
The NRAI has reportedly sought intervention from India’s Competition Commission to address these concerns. If investigated, the case could set a precedent for how digital platforms manage competition between their private labels and third-party sellers.
Impact on the Industry
These allegations come at a time when the food delivery market is witnessing rapid growth, driven by rising consumer demand and evolving dining habits. However, the NRAI warns that unchecked practices by dominant platforms could harm the long-term health of the industry by stifling innovation and limiting opportunities for smaller players.
As this controversy unfolds, all eyes will be on regulators and industry leaders to strike a balance between fostering innovation and maintaining a fair, competitive marketplace. The outcome could reshape the dynamics of India’s food delivery sector in the years to come.
