Zomato, Swiggy, Zepto face antitrust case over deep discounts

Indian consumer products distributors have now filed an antitrust case against quick commerce firms like Zomato, Swiggy, and Zepto, citing their alleged deep discounting practices.

The case, filed by the All India Consumer Products Distributors Federation (AICPDF) with the Competition Commission of India (CCI) comes at a time when the quick commerce sector is facing intense scrutiny over the pricing of products, according to a report by news agency Reuters.

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"An alarming trend of predatory pricing and deep discounting practices by Q-commerce platforms resulted in unfair pricing models," the report quoted the group's filing (which is not public) as saying.

It had said in its filing that local brick-and-mortar stores "cannot match" the quick commerce giants' discounts. It had also compared the online and offline pricing of 25 products, including of Nestle and Hindustan Unilever.

For example, a variant of a Nescafe coffee jar which a small independent Indian retailer receives from companies for about 622 rupees is offered for 514 rupees on Zepto, 577 rupees on Swiggy Instamart and 625 rupees on Blinkit, according to the report.

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On top of this, Zomato and Swiggy had gone through a separate CCI investigation last year which found out their food delivery businesses breached competition laws. The case is still ongoing.

The AICPDF with 4,00,000 distributors as members, supplies products of brands such as Nestle, Unilever and Tata to 13 million retail shops across India.

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A similar antitrust investigation last year found that Amazon and Walmart's Flipkart was favouring select sellers and was also resorting to “predatory pricing,” hurting smaller retailers.

The companies had however, denied the allegations.