Zomato Eliminates Pricing Clause That Penalized Restaurants for Lower Dine-In Prices
Zomato drops clause penalising restaurants for lower dine-in prices: Report
Business Standard
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Zomato, India's leading food delivery platform, has removed a controversial contract clause that penalized restaurants for offering lower prices to dine-in customers. This decision follows opposition from the National Restaurant Association of India, which argued that the clause restricted pricing freedom and could attract antitrust scrutiny.
- 01Zomato's clause penalized restaurants for lower dine-in prices.
- 02The National Restaurant Association of India opposed this pricing restriction.
- 03Zomato's decision comes amid a booming food services market in India, projected to reach $153 billion by 2031.
- 04The clause was never enforced but raised antitrust concerns.
- 05Zomato's contracts allowed fines equal to three times the price difference per order.
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Zomato, the largest food delivery app in India, has decided to drop a controversial contract clause that penalized restaurants for offering lower prices to dine-in customers. This clause allowed Zomato to fine restaurants if their prices for eat-in or self-delivery were less than those listed on its app. The National Restaurant Association of India, representing over 500,000 outlets, opposed this policy, arguing it restricted their pricing autonomy. Sagar J. Daryani, president of the association, expressed appreciation for Zomato's assurance that price parity would no longer be enforced. The clause, although never enforced, raised concerns about antitrust violations, with legal experts suggesting it could hurt competition. The Indian food services market, currently valued at $94 billion, is expected to grow to $153 billion by 2031. Zomato's decision reflects a response to increasing competition from major players like Domino's and KFC, as well as regulatory scrutiny following past antitrust investigations involving the company and its rival Swiggy.
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Restaurants can now set their own prices without fear of penalties from Zomato, potentially leading to more competitive pricing for consumers.
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