Case No. 22 of 2026, R. Suresh v. Eternal Limited (Formerly Zomato Limited)

Background

The present matter arose from an information filed by Shri R. Suresh (‘Informant’), an end consumer against Eternal Limited, formerly known as Zomato Limited (‘Zomato’), before the CCI alleging contravention of Sections 3 and 4 of the Act. The Informant alleged that Zomato, operating an online food delivery platform, engaged in anti-competitive conduct and abused its dominant position in the relevant market of ‘online food delivery platform services in India’. Specifically, the Informant placed a food order for ‘Ghee Pongal’ through the Zomato platform from a restaurant and was charged INR 198 (inclusive of a base food price of INR 123.50, a delivery partner fee of INR 43, a platform fee of INR 14.90, and GST of INR 16.60), whereas the identical item was available directly at the restaurant for only INR 105 (inclusive of GST) – an approximate price differential of 88%. The restaurant management reportedly informed the Informant that approximately 33% commission is deducted by Zomato from restaurant partners, compelling restaurants to artificially inflate menu prices on the platform.

The Informant further alleged that Zomato’s platform fee, initially introduced around August 2023 at approximately INR 2 per order, had escalated to INR 14.90 per order (a rise of more than 645% in less than three years) without any transparent rationale or corresponding enhancement in service. The alleged anti-competitive practices included: (i) imposition of excessive commissions upon restaurant partners; (ii) compelling restaurants to inflate menu prices; (iii) imposing arbitrary platform fees without identifiable service justification; (iv) imposition of overlapping and exploitative charges; (v) adoption of a ‘drip pricing’ methodology; and (vi) leveraging of a dominant position to impose unfair and discriminatory pricing conditions.

CCI Findings

At the outset, the CCI noted that the Informant’s allegations pertaining to inflated pricing, arbitrary platform fee, drip pricing, and overlapping charges were largely related to unfair prices and conditions, which may be examined under Section 4 of the Act, and accordingly held that no further analysis of the alleged contravention of Section 3 was required. With respect to the allegation of excessive pricing on the platform vis-à-vis direct restaurant purchases, the CCI observed that selling food items through online platforms inherently includes additional services such as platform services and delivery services, and therefore the price differential may not, prima facie, be considered abusive. Further, online food delivery platforms, being multi-sided in nature, charge platform fees from consumers for providing online food services and delivery fees for delivering food items, while simultaneously charging commissions from restaurant partners for facilitating sales, a cost which restaurants may shift to consumers by adding it to the menu price of food items.

The CCI recognised that the business models of direct restaurant sales and online food delivery services are fundamentally different, resulting in a natural variance in prices across both models. The Informant’s reliance on a single low-priced food item (INR 100) to demonstrate an 88% price differential was methodologically limited, since the percentage difference would correspondingly decline for higher-priced food items, given that delivery charges are fixed and may vary based on distance. As regards the allegation of drip pricing, the CCI observed that while drip pricing involves displaying only part of a product’s price at the outset and gradually revealing additional mandatory fees as the customer progresses toward checkout, the additional charges levied by Zomato were for additional services provided, and consumers retained the option to accept or reject the item until the last moment of placing the order. Consequently, the CCI held that drip pricing, as such, did not raise any competition issue in the present case and concluded that no prima facie case of contravention of the provisions of Sections 3 or 4 of the Act was made out against Zomato.