The Delhi High Court has taken a significant step in the ongoing antitrust investigation involving food delivery giant Zomato and the Competition Commission of India (CCI) by issuing notices to both parties. This legal action is rooted in a plea submitted by the National Restaurant Association of India (NRAI), which is contesting its exclusion from a confidentiality ring that is crucial to the investigation.

The confidentiality ring was initially established in 2022 with the aim of safeguarding sensitive information while ensuring that all parties involved in the investigation can mount a fair defense. However, in a surprising turn of events, the NRAI, which had been included in this ring, found itself ousted by the CCI in October 2024. This exclusion has raised serious concerns for the association, which argues that it hampers its ability to effectively defend itself against the claims and practices of Zomato.

During the court proceedings, Zomato's legal counsel argued in favor of the NRAI's removal, asserting that the association represents competing businesses that could potentially exploit confidential information. Justice Sachin Datta, who is presiding over the case, has taken notable action by consolidating the NRAI's plea with a related case involving another prominent food delivery platform, Swiggy. The next hearing in this ongoing legal matter is scheduled for April 23, 2024, which is anticipated to shed more light on the complexities at play.

This court action comes at a time of heightened scrutiny for Zomato, which has faced significant challenges over the past two years regarding its market practices. The NRAI's original complaint outlined a series of alleged anticompetitive practices by foodtech platforms, including Zomato, which the association claims involve deep discounting, bundled services, exorbitant commission rates, delayed payments, and the imposition of one-sided contractual terms that disadvantage restaurants.

In April 2024, following a legal ruling, the NRAI was granted limited access to the findings of the CCI's investigation, which was conducted under the umbrella of the confidentiality ring. However, Zomato and Swiggy swiftly contested this ruling in the Karnataka High Court, expressing concerns that disclosure of sensitive information could lead to "irreparable commercial harm." The Karnataka High Court's decision in June 2024 subsequently prompted the CCI to reevaluate its position, leading to the NRAI's exclusion from the confidentiality ring in October 2024. This turn of events propelled the association to seek legal recourse at the Delhi High Court, reflecting the deepening tensions between the restaurant industry and food delivery platforms.

Earlier this year, the NRAI also contemplated initiating separate legal actions against Zomato and Swiggy, further underscoring the growing friction between the restaurant sector and food delivery services as they grapple with the evolving landscape of digital commerce in India.

This extensive legal saga highlights not only the complexities of competition law in India's rapidly growing food delivery market but also raises significant questions about the fairness and transparency of practices employed by major players like Zomato and Swiggy as they navigate their relationships with partner restaurants.