Questioning CCI's rejection of abuse of dominance claims against Zomato

The Competition Commission of India’s order dismissing the abuse of dominance complaint against Zomato raises important questions about how antitrust norms are applied to digital platforms. While the commission stated that Zomato did not have a dominant position, critics argue that the definition of the relevant market may have been too narrow. In the food delivery sector, network effects and data advantages can create quasi-monopolistic power, even if multiple apps exist. The platform fee and dynamic delivery charges affect millions of consumers and thousands of restaurant partners, who may have little choice but to accept Zomato’s terms. The CCI’s decision could be seen as a missed opportunity to examine whether such fees are unfair or discriminatory under the Competition Act. There are concerns that the order sets a precedent that may embolden platforms to raise fees without adequate justification, potentially hurting small businesses and low-income consumers. Moreover, the ruling sidesteps the issue of algorithmic pricing transparency. Consumer groups had argued that Zomato’s fees were not clearly disclosed and varied in ways that could mislead users. By rejecting the complaint, the CCI may have inadvertently signaled that aggressive pricing strategies are acceptable as long as they do not formally exclude rivals. This could undermine the spirit of competition law, which aims to protect the competitive process, not just direct competitors. Going forward, the CCI should revisit its market definition criteria to capture the unique dynamics of digital platforms, ensuring that consumer welfare remains the central focus.