Case Law Details
Rohit Arora Vs. Zomato Private Limited (now Zomato Limited) (Competition Commission of India)
On careful perusal of the Information, material available on record and submissions filed by the parties, the Commission finds that the grievance of the Informant primarily stems from the three incidents cited in the Information. The first incident pertains to the food ordered by the Informant using Zomato’s platform on 14.07.2019, which could not be delivered to the Informant because the Informant’s phone was unreachable which, according to the Informant was intimated to the delivery person in advance. The second incident relates to food spillage for an order placed by the Informant using Zomato’s platform in September 2020; and the third incident is with regard to an order placed by the Informant through Zomato on 30.10.2020, which was allegedly cancelled within a few seconds of placing the order with the partner restaurant and for which Zomato refunded only 50% of the order amount. All these three incidents have been termed as ‘abuse of dominant position’ by the Informant under Section 4 of the Act. Besides, the Informant also cursorily alleged tie-in arrangement in respect of online food ordering and food delivery under Section 3(4)(a) of the Act, though, in his rejoinder to Zomato’s response, this allegation has been stated in a detailed manner. Further, the Informant stated in his rejoinder that he does not intend to press upon violation of Section 4(2)(a)(i) of the Act any further.
The Commission at the outset notes that Zomato has rebutted on facts with regard to each of the three incidents and has stated that in one of the incidents (e., incident 3) a full refund was given to the Informant as against his misrepresented claim that he only received half refund. In his rejoinder, the Informant has not disputed having received a full refund with regard to this incident. With regard to another incident (i.e., incident 2), Zomato has stated that, despite the customer care executive specifically asking the Informant to choose which item he had issue with, the Informant did not proceed with the node. Had the Informant selected the items he had an issue with, the node would have asked for a photograph of the spilled food. In his rejoinder, the Informant explicitly chose not to comment further on this. As regards the remaining incident (i.e., incident 1), while the Informant may have been aggrieved as a consumer for not being delivered the food, the incident does not, as such, appear to qualify to be an abusive act on the part of a platform.
The Commission observes that the Informant has delineated two separate relevant markets as online food ordering services provided by food aggregator app in India and food delivery services in India, which Zomato has disputed. As per Zomato, the food services industry is extremely dynamic and integrated, due to which such delineations do not accurately reflect ground realities. Moreover, Zomato asserted that its customers have the option to search for or discover restaurants through various online and offline methods, thus, there is no foreclosure, there is ease of switching, constant multi-homing and low barriers to entry as apart from it, its competitors, e.g. Swiggy and Dunzo, also facilitate delivery of food/ other items and there are new entrants in the fray like Amazon also.
The Commission does not find these aforesaid definitions in consonance with the market realities and approach adopted by the Commission while dealing with the platform market cases. While each platform market may have its own specificities, some common broad principles apply to each sector. The Commission has also looked into a case [bearing Case No. 16 of 2021, NRAI vs. Zomato and Anr.] against Zomato and another online intermediary for food ordering and delivery, e., Swiggy. Since the allegations in that case mainly pertained to Section 3(4) of the Act, the relevant market was not required to be delineated as per the provisions of the Act. However, Zomato and Swiggy were observed to be online food delivery platforms operating as online intermediaries for food ordering and delivery. Further, the Commission observed these two intermediaries to be competing with each other in the same segment on various parameters. Placing reliance on the said observations, the Commission is of the view that prima facie Zomato does not appear to hold a dominant position.
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