Zomato drops pricing clause after restaurant backlash

Zomato has dropped a contract clause that let it penalize restaurants for offering lower prices to walk-in diners or on their own delivery channels after objections from restaurant groups.

Contracts showed Zomato could fine outlets and use mystery shopping to check pricing, though a source said the clause was never enforced.

The National Restaurant Association of India said the policy limited restaurants’ control over pricing, while lawyers and a former antitrust official said the clause could have drawn scrutiny under Indian competition law.

A 2024 antitrust investigation had already found Zomato and Swiggy breached competition rules by favoring select restaurants, which both companies denied.

🔗 Source: Reuters

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Implications, context, and why it matters.

Zomato’s removed clause comes amid broader competition-law scrutiny

Zomato dropped the clause while facing wider competition-law scrutiny in India, including a Competition Commission of India (CCI) investigation ordered in April 2022 after a complaint from the National Restaurant Association of India (NRAI) 1.
That CCI case goes beyond price-parity terms. It also covers alleged exclusivity deals, concerns over Zomato’s and Swiggy’s dual role through private-label brands and cloud kitchens, and their use of platform data 2.
A non-public report from the CCI’s investigation arm, shared in March 2024, found Zomato and Swiggy breached competition laws through exclusivity arrangements and price-parity-related conduct 3.
Some restaurants say Zomato account managers still informally push them to keep prices the same across channels, which suggests the imbalance in bargaining power may still hold 4.

India’s Zomato–Swiggy dispute echoes global debates over platform power

The dispute tracks wider scrutiny of digital platforms, from app stores to online travel agencies, where a small group of intermediaries can shape market access and pricing for many smaller businesses 5.
Zomato and Swiggy lead India’s food-delivery market. The CCI’s ruling in the 2022 case could set a precedent for digital-platform rules in the country 2.
That decision may also influence how Indian regulators handle the companies’ push into quick commerce, which means rapid delivery of groceries and other items, after fresh antitrust complaints over alleged predatory pricing 6.
At the same time, alternatives such as the government-backed Open Network for Digital Commerce (ONDC), a public digital network for online commerce, and lower-commission models are giving restaurants more ways to reach customers beyond the largest platforms 4.