Swiggy Challenges in Court the CCI's Order to Share the Company's Data with Restaurant Association

Swiggy Challenges in Court the CCI's Order to Share the Company's Data with Restaurant Association
Photo: Swiggy 22.05.2024 309

Swiggy had disclosed the information to the Director General (Investigation) of the CCI as part of the DG’s investigation into allegations that Swiggy and Zomato had indulged in anti-competitive practices.

Food delivery platform Swiggy has moved the Karnataka High Court against the Competition Commission of India (CCI)'s order granting the National Restaurant Association of India (NRAI) representatives access to the app's private data. 

According to a Bar & Bench report, Swiggy gave this private information to the Director General (Investigation) or DG of the CCI to look into claims made by the NRAI regarding anti-competitive behaviour by Zomato and Swiggy.

Swiggy, in its case before the High Court, argued that the CCI's decision to grant NRAI access to such highly sensitive company information was “arbitrary, unreasoned, against the Competition Act,” and would also irreparably cause harm to the food delivery platform.

The High Court judge questioned the competent court's authority to hear the plea in this regard on May 21, citing the case's prior handling by the CCI in Delhi. In turn, Swiggy pointed out that its registered office is in Bengaluru and it had received communications from the DG’s office in Bengaluru and, therefore, the cause of action has partly arisen in Bengaluru. 

The matter is slated to be heard further on the question of jurisdiction on May 23. 

What is the matter of disagreement?

The conflict stems from a complaint that NRAI made to the CCI in 2021. In its grievance, the NRAI contended that Swiggy and Zomato were inevitable trade partners for eateries due to their dominant market positions.

The NRAI charged the two delivery behemoths with several anti-competitive acts, including mandatory delivery service enrolment, customer privacy masking, conflict of interest in cloud kitchen listing, unfair contracts, and high commissions plus rising discounts.

In 2022, the CCI determined that there was a prima facie case against Swiggy and Zomato. As a result, it directed the DG to look into the accusations made by the NRAI. As part of this probe, Swiggy is stated to have submitted highly confidential information in response to DG's questions between September 2022 and October 2023.

In March this year, it was informed that the DG had concluded its probe.

Swiggy and Zomato later filed applications for access to the confidential version of the DG’s findings, so that they may be able to better respond to the DG’s findings against them.

Meanwhile, the NRAI also sought to get access to the confidential version of the investigation report that concerned both Swiggy and Zomato.

On April 24, 24 the CCI passed an order allowing the same. The NRAI representatives, however, had to give an undertaking not to share this information with anyone else and to destroy the said confidential information once the CCI proceedings were over.

This directive has now been challenged by Swiggy before the High Court. As per Swiggy, disclosure of confidential information belonging to Swiggy to a third party would violate the CCI’s obligation to preserve confidential information under Section 57 of the Competition Act, 2002, read with Regulation 35 of the Competition Commission of India (General) Regulations, 2009.

Source: Bar & Bench, CNBC-TV18

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