1. Facts of the Case
Mr. R. Suresh, an end consumer, ordered Ghee Pongal from Sree Ariya Bhavan through Zomato
(now Eternal Ltd.).
The price of the same food at the restaurant was ₹105 including GST, but when ordered
through Zomato, he paid ₹198. The Zomato bill included ₹43 delivery charges, ₹14.90 platform
fee and ₹16.60 GST. Thus, there was a difference of about ₹93 (88%).
2. What did Suresh allege?
He alleged that Zomato was abusing its dominant position by:
Charging excessive/inflated food prices.
Imposing an arbitrary platform fee.
Charging delivery fee and other overlapping charges.
Using drip pricing, i.e. showing some charges only later during checkout.
Charging commissions from restaurants, which allegedly forced restaurants to increase
menu prices.
Imposing unfair and discriminatory pricing conditions.
He therefore asked CCI to investigate Zomato, stop the platform fee, disclose its pricing
structure and impose penalties.
3. Main Issue
Whether Zomato's higher prices, platform fee, delivery charges and drip pricing amounted to anti-competitive conduct or abuse of dominant position under Sections 3 and 4 of
the Competition Act?
4. What did CCI say?
CCI held that the higher price on Zomato was not, by itself, abusive.
The reason was simple: buying food directly from a restaurant and ordering through an online
platform are two different business models. Zomato provides additional services such as the
online platform and delivery. Therefore, additional charges can arise.
CCI also observed that restaurants pay commission to the platform and may pass that cost to
consumers by increasing their online menu prices.
5. What about "Drip Pricing?
Drip pricing means initially showing a lower/basic price and then adding charges such as
delivery fee, platform fee and taxes during the checkout process.
CCI said that in this case, these additional charges were for additional services, and the
consumer could still accept or reject the order before finally placing it. Therefore, CCI did not find a competition issue merely because of this pricing method.
6. Final Decision
CCI found that there was no prima facie case of violation of Sections 3 or 4 of the Competition Act.
Therefore, CCI closed the Information under Section 26(2). The interim relief sought under
Section 33 was also rejected.
7. In Very Simple Words
Suresh's argument:
“Food costs ₹105 at the restaurant but ₹198 on Zomato. Zomato is charging excessive and
unfair fees and is abusing its position.”
CCI's answer:
“Zomato is providing additional services like online ordering and delivery. Therefore, the online
price need not be the same as the restaurant price. The additional charges alone do not
establish abuse of dominant position.”
Result: Case closed — no prima facie violation of Sections 3 or 4.
⭐ Learning from the Case
Merely charging a higher price on an online platform than at the physical restaurant does not
automatically amount to abuse of dominant position, especially where the online platform
provides additional services and the consumer has the choice to accept or reject the order.