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Analyzing Fair Competition In The Digital Marketplace: Rohit Arora V Zomato Private Limited

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 partner restaurants.

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:
  1. 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.
  2. 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 dominant position.
  3. 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,, Deliveroo, Food Panda, etc., in order to demonstrate that Zomato's policy was abusive.

Issues raised:
  • 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?
Zomato's reply
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.

CCI's order
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 alleged violations.

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.

Critical Analysis
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 proof.

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 provides 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 competition cases.

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
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Authentication No: DE335392241327-19-1223

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