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Swiggy Challenges CCI Order on Sharing Confidential Information with NRAI

Swiggy, India’s leading Food delivery platform has filed a petition with the Karnataka High Court challenging the Competition Commission of India’s (CCI) decision to grant representatives of the National Restaurant Association of India (NRAI) access to its confidential information.

This information had been disclosed to the Director General (Investigation) of the CCI as part of an inquiry into allegations that Swiggy and Zomato engaged in anti-competitive practices.

Legal Proceedings and Jurisdiction

In its petition, Swiggy argued that the CCI’s April 24 decision to allow NRAI access to sensitive business information was arbitrary, unreasoned, and contrary to the Competition Act. Swiggy contended that this decision could cause irreparable harm to its business.

The case was briefly heard by Justice MGS Kamal on Tuesday, May 21, where the judge questioned whether the Karnataka High Court had jurisdiction, given that the case was initially handled by the CCI in Delhi.

Senior Advocate Sajan Poovayya, representing Swiggy, maintained that since the CCI is a national body, the Karnataka High Court has the authority to hear the matter. Swiggy pointed out that its registered office is in Bengaluru, and it had received communications from the DG’s office in Bengaluru, which partially justifies the jurisdiction.

The matter is scheduled for further discussion on jurisdiction on May 23 at 2:30 PM. Additional Solicitor General N Venkataraman accepted notice on behalf of the CCI. Swiggy’s counsel has agreed to notify the other respondents, NRAI and Zomato, about the matter.

Allegations and Background

The dispute originates from a complaint filed by NRAI with the CCI in 2021. NRAI, representing restaurants and cloud kitchens partnered with Swiggy and Zomato, accused the two platforms of anti-competitive practices. Key allegations included:

  • Forcing restaurants to use their delivery services even if the restaurants only wanted to be listed on the app, an unfair bundling of services.
  • Data masking, preventing restaurant partners from accessing information about customers, delivery locations, and delivery times, despite being held accountable for deliveries.
  • Conflict of interest due to Swiggy and Zomato listing their own cloud kitchens on their platforms.
  • One-sided contracts due to the platforms’ superior bargaining power.
  • High commission rates reducing restaurant revenues and increased discounts leading to higher expenses for restaurants.

In 2022, the CCI found a prima facie case against Swiggy and Zomato, prompting the DG to investigate further. As part of this investigation, Swiggy submitted confidential information between September 2022 and October 2023. In March 2023, the DG concluded its probe.

Confidential Information Dispute

Swiggy and Zomato requested access to the confidential findings of the DG to respond adequately to the allegations. NRAI also sought access to this confidential report concerning both Swiggy and Zomato. On April 24, the CCI allowed this access, with the condition that NRAI representatives must undertake not to share the information and to destroy it after the CCI proceedings.

Swiggy’s petition argues that sharing this information with NRAI violates the CCI’s own practices and Section 57 of the Competition Act, 2002, along with Regulation 35 of the Competition Commission of India (General) Regulations, 2009. Swiggy fears that the NRAI might disclose its commercially sensitive information to third parties, adversely impacting Swiggy’s business operations.

Swiggy’s Request to the High Court

Swiggy has urged the High Court to overturn the CCI’s April 24 order. If the information has already been provided to NRAI, Swiggy has requested the court to order NRAI to destroy the confidential records.

Swiggy’s petition was filed through advocates Anind Thomas, Dharma Tej Koneru, Anandi Kamani, Prashasti Singh, Radhika V, Gautham R, Vinudeep R, Aadith Sridhar, Abhay Shetty, and Asiri Raj of AZB & Partners.

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