In the case of Rohit Arora v Zomato Private Limited
, Mr. Arora, a
longstanding consumer of Zomato's services since 2018, has filed a complaint
under Section 19(1)(a) of the Competition Act, 2002. The complaint alleges that
Zomato, a prominent player in the online food ordering industry, has engaged in
practices that contravene provisions of Sections 3(4) and 4 of the Act.
Mr. Arora contends that the company's purported abuse of its dominant position
includes raising food delivery charges and imposing unfair, discriminatory, and
exorbitant delivery fees on consumers. Additionally, it is alleged that Zomato
has implemented vertical restraints on restaurants, preventing them from
conducting their own deliveries, and creating barriers for entry by not
assigning delivery executives.
To substantiate these claims, Mr. Arora presents three specific incidents, each
illustrating what he perceives as Zomato's unjust treatment of its customers and
Facts of the case
In this case, a complaint was lodged by an individual (referred to as the
Informant) under Section 19(1)(a) of the Competition Act, 2002, against Zomato
Private Limited (referred to as OP). The complaint alleged that OP violated
Sections 3(4) and 4 of the Act. The Informant, who had been a regular consumer
of Zomato since 2018, claimed that Zomato misused its dominant position by
increasing food delivery fees and imposing unfair, discriminatory, and
excessively high delivery charges on its customers.
Additionally, it was asserted that Zomato imposed vertical restrictions on
restaurants, preventing them from conducting their own deliveries, and hindered
food delivery from less-favored restaurants by not assigning delivery personnel.
To support the complaint, the Informant cited three specific incidents:
- The first incident involved Zomato cancelling an order, stating that
they were unable to deliver it due to the customer's unavailability at the
provided address and the customer's phone being unreachable. The restaurant,
having already prepared the order, refused to refund the amount for the
order. The Informant discovered in Zomato's terms of service that, according
to Term XIII, any cancellation would be considered an authorization breach,
allowing Zomato to impose liquidated damages at its discretion. The
Informant viewed this policy as an abusive practice on the part of Zomato.
- The second incident revolved around a food spillage. Zomato responded by
stating that their delivery personnel had consistently delivered flawless
orders in the preceding week, holding a rating of 4.9 out of 5 stars. The
Informant believed that this response constituted an abuse of Zomato's
- The third incident concerned a partial refund on the cancellation of an
order. Zomato refunded only 50% of the order amount, citing that the
restaurant had already commenced preparation of the food. The Informant
compared Zomato's cancellation policy with that of other platforms like
Swiggy, Talabat.com, Deliveroo, Food Panda, etc., in order to demonstrate
that Zomato's policy was abusive.
- Whether the actions of Zomato Private Limited under the Competition Act,
2002, are in contravention of provisions of Sections 3(4) and 4 of the Act?
- Whether Zomato allegedly imposed dominance in the online food ordering
market, abusive and exploitative conduct, and imposition of unfair
conditions on consumers and restaurants?
- Whether Zomato bundled online food ordering services with food delivery
services and imposed vertical restraints on restaurants, creating entry
barriers for other logistic companies?
In response to the first incident, Zomato clarified that the Informant,
after placing an order, directly instructed the delivery partner to contact him
on his landline number rather than the registered mobile number. Normally, such
instructions conveyed through Zomato's customer service would be relayed to the
delivery partner. However, in this instance, the Informant's direct
communication with the delivery partner made it unfair for Zomato to issue a
full refund, considering the time, effort, and fuel expended by the partner in
the pickup and delivery process.
Regarding the second incident, Zomato explained that its customer support
executive had requested the Informant to identify the spilled item. However, the
Informant did not pursue the complaint and did not furnish a photo of the spill.
This suggests that the Informant's primary concern was expediting a refund. When
it became apparent that this would not be granted, he chose not to proceed with
the complaint. Zomato contends that if the case were genuine, the Informant
should have reported the issue to the customer support team or through email,
along with photographic evidence of the spillage.
In addressing the third incident, Zomato contested the Informant's assertion
that he cancelled the order on 30.10.2020 'within 30�40 seconds'. According to
Zomato, the order was placed at 11.09 A.M., and the request for cancellation was
made at 11.11 A.M., a mere two minutes after placing the order. Despite this,
and contrary to the Informant's claim, he was granted a full refund for the
order�an important detail that the Informant allegedly chose to omit
deliberately and deceitfully.
Following a comprehensive examination, the Competition Commission of India has
arrived at the conclusion that Zomato Private Limited is not in breach of the
Competition Act, 2002, as contended by Mr. Rohit Arora. The Commission's
investigation revealed that Zomato does not hold a dominant position within the
market, thus negating the allegation of abuse of such a position.
Moreover, in scrutinizing the three specific incidents cited by Mr. Arora as
instances of abuse, the Commission found that the evidence presented did not
sufficiently substantiate his claims. In contrast, Zomato provided compelling
evidence that effectively refuted these allegations. It was noted that Mr. Arora
did not effectively counter this evidence, which further weakened the case for
the alleged abuses.
In light of these findings, the Commission has determined that further
investigation into the claims of abuse of dominance under Section 4 of the Act
is unnecessary. This decision is based on the lack of substantial evidence and
the failure to establish Zomato's dominant position in the market, as well as
the robust counter-evidence presented by the company. As a result, the
Commission has concluded that Zomato Private Limited is not guilty of the
Principle of law
The principle of law applied in the case involving Mr. Rohit Arora and Zomato
Private Limited was the Competition Act, 2002, specifically provisions of
Sections 3(4) and 4. The case examined allegations of Zomato's dominance in the
online food ordering market and potential abuse of this dominance. The
Commission considered whether Zomato's conduct constituted unfair conditions on
users/consumers and vertical restraints on restaurants. However, the Commission
found that Zomato did not appear to hold a dominant position and no instance of
abuse was made out against the company.
The case of Rohit Arora v Zomato Private Limited
offers a constructive
lens through which to view the application of legal principles in the digital
marketplace. The proactive involvement of the Competition Commission of India
showcases a commitment to upholding fair competition and safeguarding consumer
interests in the evolving realm of online services.
Zomato's adept handling of the allegations, backed by robust evidentiary
support, exemplifies a commendable adherence to legal principles. The company's
ability to effectively counter the claims demonstrates a dedication to due
process and a respect for the rule of law. This approach not only underscores
the importance of evidence-based decision-making in legal matters but also
reinforces the principle that claims should be substantiated by substantial
Furthermore, the case underscores the legal significance of clear and
standardized communication channels in contractual relationships. It highlights
the need for adherence to established policies and procedures, which are crucial
for maintaining legal integrity and ensuring a consistent application of
contractual terms. Zomato's adherence to its terms of service exemplifies a
commitment to legally binding agreements and fair dealings.
In conclusion, the case underscores the positive role of regulatory bodies and
the legal system in preserving a competitive and trustworthy digital
marketplace. It serves as a testament to the vital importance of evidence-based
decision-making and adherence to legal principles. Through this case, Zomato and
the Competition Commission of India demonstrate a commitment to the rule of law,
fostering a legal framework that ensures fairness, transparency, and integrity
in the digital sphere.
In conclusion, the case of Rohit Arora v Zomato Private Limited
valuable insights into the dynamics of the digital marketplace and the
application of legal principles therein. The Competition Commission of India's
thorough examination and subsequent determination that Zomato did not hold a
dominant position underscores the importance of a rigorous legal assessment in
Zomato's adept defense, supported by compelling evidence, exemplifies a
commitment to legal integrity and due process. This approach highlights the
significance of substantiating claims with substantial proof, in accordance with
established legal standards. It reaffirms the principle that legal proceedings
should be grounded in factual accuracy and adherence to the rule of law.
Moreover, the case emphasizes the crucial role of clear communication and
adherence to established policies in contractual relationships. Zomato's
adherence to its terms of service underscores the importance of upholding
legally binding agreements and ensuring transparency in business interactions.
Overall, the case showcases the constructive interplay between regulatory
oversight, legal principles, and responsible corporate behavior in the digital
marketplace. It serves as a reminder of the vital importance of evidence-based
decision-making and adherence to legal standards. Through this case, Zomato and
the Competition Commission of India have demonstrated a commitment to upholding
fairness, transparency, and legal integrity in the digital landscape.
Award Winning Article Is Written By: Ms.Dayitha.T.K
Authentication No: DE335392241327-19-1223