Why CCI Rejected Allegation of 'Abuse of Dominance' Against Zomato Platform Charges and Delivery Charges?

Story so far: The Competition Commission of India (CCI) on Thursday (July 24, 2026) closed a complaint against Eternal Ltd, saying no prima facie case of abuse of dominance was found in connection with platform fees and pricing practices on its food delivery platform, Zomato. In its preliminary assessment, the Commission found no breach of the Competition Act 2002 (the 2002 Act) in the company’s pricing practices, including platform fees, delivery fees and the difference between menu prices charged by restaurants and prices displayed in the app. Eternal Ltd is the parent company of food delivery platform Zomato and e-commerce platform Blinkit.

What was stated in the complaint?

The complaint was filed by an individual consumer, R. Suresh, who alleged that Zomato was abusing its dominant position in the online food delivery platform services market in India. Under the Competition Act 2002 (2002 Act), a dominant position is defined as a position of economic power that enables a business to operate independently of competitive forces or to influence the market to its advantage.

The complaint arose from an order Mr. Suresh placed through Zomato on April 13, 2026. He ordered a serving of Ghee Pongal from Sree Ariya Bhavan, which was listed at ₹ 123.50 on the app. According to the complaint, the final bill increased to ₹198 after adding delivery charge of ₹43, platform charge of ₹14.90 and applicable GST. Mr. Suresh subsequently purchased the same item directly from the restaurant for ₹ 105 inclusive of GST.

Relying on this price difference, Mr Suresh argued that Zomato was using its dominant position to impose unfair charges on consumers while forcing restaurants to increase menu prices. He alleged that restaurants were jacking up prices on the platform because Zomato deducts a commission of around 33% from orders.

The market regulator was also informed that the delivery app had seen a steep rise in platform fees over the years. Mr Suresh alleged that the company had introduced a charge of around ₹2 per order in 2023 but increased it to ₹14.90 per order in less than three years, a jump of over 645%, without any “transparent rationale” or corresponding improvement in services. According to the complaint, these practices amounted to abuse of Zomato’s dominant position, prohibited under Section 4 of the 2002 Act.

What was the relief?

The complaint alleged that Zomato violated Sections 3 and 4 of the Competition Act, 2002 (the 2002 Act), which prohibit anti-competitive agreements and abuse of a dominant position. According to the complainant, the platform imposed excessive commissions, charged an arbitrary platform fee, adopted “drip pricing” practices (where additional mandatory fees are disclosed only at later stages of the transaction), and imposed unfair and discriminatory pricing terms.

Accordingly, Mr. Suresh urged the regulator to order an inquiry into Zomato’s conduct. He also requested disclosure of the company’s pricing methodology and commission structure, an end to the collection of platform fees, remedies to address the alleged anti-competitive practices, the imposition of sanctions and a cease-and-desist order ordering the company to end such practices.

In addition to the complaint, Mr. Suresh also filed a preliminary injunction against the CCI decision. He asked the Commission to stop Zomato from continuing to collect platform fees and to order it to transparently disclose all fees in advance. He argued that the continued collection of platform fees had caused irreparable harm to consumers and that the balance of benefits rested in favor of granting interim measures.

What happens after CCI finds no prima facie case?

The CCI closed the complaint under Section 26(2) of the Act of 2002. Under the Act, every complaint is first subjected to a preliminary examination to determine whether it discloses a prima facie case of infringement. At this stage, the Commission does not conduct a detailed examination of the evidence or determine whether the allegations are ultimately proven.

Instead, it considers whether the material available to it is sufficient to warrant a formal investigation. If he finds a prima facie case, he issues an order under Section 26(1) directing his investigative arm, the Director General (DG), to conduct a detailed investigation and submit a report. However, the Directorate-General’s report is not binding on the Commission, and the Commission will take a final decision on whether there has been a breach of the law after considering the report and hearing the parties.

However, in this case, the Commission concluded that no prima facie case had been made out and also rejected the complainant’s request for an interim measure seeking an immediate halt to the collection of platform fees.

A winding-up order under Section 26(2) is appealable to the National Company Law Appellate Tribunal (NCLAT) under Section 53A of the Act of 2002. The consequences of such winding-up also became more significant after the insertion of Section 26(2A) in the Competition (Amendment) Act, 2023. The provision empowers the Commission not to accept new information based on the same or substantially the same the same facts and issues that have already been decided. To discourage repeated complaints, it confers greater finality on an order under Section 26(2) and makes an appeal to the NCLAT the principal mode of challenging such an order.

What were the watchdog’s findings?

The commission rejected the complainant’s claim that the price of Ghee Pongal on Zomato was unfair, finding that food sold through the online delivery platform cannot be directly compared to food purchased in a restaurant. He reasoned that online food delivery includes additional services beyond the food itself, including online ordering, platform access and door-to-door delivery. Consumers who choose to use these services pay additional fees such as delivery fees and platform fees. As the business models of restaurants and online food delivery platforms are fundamentally different, the Commission decided that differences in the final price of food do not in themselves indicate anti-competitive behaviour.

The CCI also rejected the ‘drip price’ claim. Drip pricing was found to be an accepted sales practice in which a business initially displays only a portion of a product’s price before disclosing other mandatory fees during the checkout process, such as platform fees, delivery fees, taxes or surcharges. In this case, the Commission noted that these fees were collected for various services provided by the platform and that consumers had the option to accept or reject the order until the final checkout stage. It therefore decided that this practice did not in itself raise any competition law concerns.

Responding to allegations that restaurants are raising menu prices to match Zomato’s commissions, the Commission noted that online food delivery platforms operate as multilateral businesses. They charge consumers platform and delivery fees for facilitating online ordering and delivery, while charging commissions to restaurants for listing and selling food through the platform. Restaurants can choose to recoup those commissions by raising menu prices on the app, but the Commission believed that this alone did not constitute a breach of the 2002 Act.

The Commission also found that the complainant’s comparison was based on a single low-cost food which showed an 88% price difference. She noted that since the delivery fees are largely fixed, the percentage difference will be substantially less for higher value orders. Accordingly, the regulator ruled that none of the allegations raised a prima facie case of anti-competitive conduct or abuse of a dominant position to warrant a formal investigation under the 2002 Act.

What are the consequences?

According to Toshit Shandilya, competition law partner at AZB & Partners, while consumers may feel aggrieved by Zomat’s prices, the CCI does not deal with individual consumer complaints.

“The CCI examined the business model and found that each fee, be it platform fee, delivery fee or restaurant commission, was related to a different service rendered. Therefore, it found no reason to order a formal investigation. To secure a favorable order under the Competition Act, the complainant must show a distinct anti-competitive design, which usually requires market-wide evidence rather than evidence obtained from a single transaction,” he told The Hindu.

However, Mr Shandilya said the regulation does not deal with consumer law. “The CCI’s finding under the Competition Act does not determine the outcome under the Consumer Law. This order is limited to the Competition Act. It has no bearing on how the trickle-down pricing claim would be adjudicated under the Consumer Law,” he said.