The Competition Commission of India (CCI) has held that a difference between restaurant pricing and online platform pricing does not, by itself, establish abuse of dominance where the online model includes distinct additional services such as platform access and delivery, and where consumers voluntarily choose that convenience at disclosed additional cost. The Commission also held that complaints relating to platform fee, delivery fee and similar add-on charges are essentially issues of pricing under Section 4 of the Competition Act, but in the present case the material placed on record did not disclose any prima facie abusive conduct.
Accordingly, the Commission closed the complaint against Zomato, holding that drip pricing, in the circumstances of this case, did not amount to a competition law concern because the charges were for additional services and the consumer could still decide not to complete the purchase before placing the order.
The Coram of Ravneet Kaur (Chairperson), Sweta Kakkad (Member) and Deepak Anurag (Member) noted that the informant was essentially an end consumer aggrieved by higher pricing on the food delivery platform as compared to the restaurant, the charging of platform fee without identifiable service justification, drip pricing, and overlapping charges such as delivery fee and platform fee. It observed that although allegations were framed under both Sections 3 and 4 of the Act, the real substance of the grievance related to unfair prices and charges, which are matters that may be examined under Section 4, and therefore no further analysis under Section 3 was required.
On the issue of higher pricing on the platform compared to the restaurant, the Commission took a prima facie view that such difference may not amount to abuse because sale through an online platform includes additional services such as platform access and delivery services, unlike direct restaurant purchase. The Commission explained that online food delivery platforms are multi-sided platforms: they charge platform fee from consumers for online food services, delivery fee for transport of food, and commission from restaurant partners for facilitating sales through the platform. It further noted that since commissions are paid by restaurants, restaurants may pass on that burden to consumers by increasing menu prices on the platform, and taxes apply in both models.
The Commission also observed that a consumer unable or unwilling to visit the restaurant may choose the convenience of online food delivery by paying additional charges such as delivery fee and platform fee. It held that the business model of offline restaurant sale and online food delivery is different, and therefore the price of the same food product may legitimately vary across the two channels. The Commission additionally remarked that the informant had relied only on a single low-priced food item costing INR 100 to show an 88% difference, and if the food item were priced higher, the percentage difference would naturally reduce because delivery charge is generally a fixed charge and may also vary with distance.
As regards drip pricing, the Commission described it as a sales technique where only part of the total price is shown initially and additional mandatory fees such as platform fee, delivery fee, taxes or surcharges are disclosed progressively during the purchase process. However, it held that such additional charges were linked to additional services and that consumers retained the option to accept or reject the order until the final stage of placing it. On that reasoning, the Commission concluded that drip pricing, by itself, did not raise any competition issue in the facts of the case.
Briefly, an information was filed before the Competition Commission of India by R. Suresh under Section 19(1)(a) of the Competition Act, 2002 against Eternal Limited, formerly known as Zomato Limited, alleging contravention of Sections 3 and 4 of the Act. The informant stated that on April 13, 2026 he placed an order for “Ghee Pongal” through the Zomato platform from Sree Ariya Bhavan, where the base food value was shown as INR 123.50, but he ultimately paid INR 198 including INR 43 as delivery partner fee, INR 14.90 as platform fee and INR 16.60 as GST.
The informant then visited the same restaurant directly and purchased the identical item for INR 105 inclusive of GST. Page 1 According to him, the restaurant informed him that around 33% commission is deducted by Zomato from restaurants, which forces restaurants to increase platform prices, and that restaurants also have to bear advertisement and promotional visibility expenses to remain competitive on the platform.
The informant also specifically challenged the “platform fee”, saying that despite the platform already earning through restaurant commissions and delivery charges, it additionally recovered INR 14.90 from consumers without any separately identifiable extra service. He claimed that this fee had risen from around INR 2 per order in August 2023 to INR 14.90 in less than three years, amounting to an increase of more than 645% without any transparent reason or corresponding service enhancement. On that basis, he alleged abuse of dominant position, unfair and discriminatory pricing, excessive commissions, exploitative layered pricing and anti-competitive commercial arrangements affecting consumers and restaurant partners across India.
The informant argued that the matter involved a continuing cause of action and raised fresh issues such as arbitrary escalation of platform fee, drip pricing, indirect price inflation and large-scale unjust enrichment. He alleged violation of Sections 3 and 4 on the grounds of excessive commissions, forcing restaurants to inflate menu prices, imposing arbitrary platform fees, levying overlapping charges including commissions, delivery charges and advertisement charges, and using drip pricing while leveraging dominance to impose unfair conditions.
