Swiggy moves Karnataka High Court against CCI order to share confidential info with restaurant association

Food delivery platform Swiggy has filed a petition before the Karnataka High Court challenging the Competition Commission of India’s (CCI) April 24 decision to give representatives of the National Restaurant Association of India (NRAI) access to confidential information about the food delivery app [Swiggy Limited v. Competition Commission of India and ors]..Swiggy had disclosed this confidential information to the Director General (Investigation)/ DG of the CCI as part of an investigation into allegations by NRAI that Swiggy and Zomato had indulged in anti-competitive practices.In its petition before the High Court, Swiggy has contended that the CCI’s decision to allow NRAI to access such highly sensitive business information was arbitrary, unreasoned, against the Competition Act and would also cause irreparable harm to Swiggy.The matter was briefly heard by Justice MGS Kamal on Tuesday (May 21) afternoon, when the judge questioned whether the Karnataka High Court has the jurisdiction to hear the plea since the case was earlier dealt with by the CCI in Delhi..Senior Advocate Sajan Poovayya, appearing on behalf of Swiggy, asserted that since the CCI is a national body, the Karnataka High Court also has the jurisdiction to hear the matter. Swiggy’s petition pointed out that its registered office is in Bengaluru and it had received communications from the DG’s office in Bengaluru and, therefore, the cause of action has partly arisen in Bengaluru.The matter is slated to be heard further on the question of jurisdiction on May 23 (Thursday) at 2.30 PM. Additional Solicitor General N Venkataraman accepted notice on behalf of the CCI. Swiggy’s counsel has undertaken to serve notice of the matter to the other two respondents in the matter, namely NRAI and Zomato..The dispute is rooted in a complaint filed with the CCI in 2021 by NRAI (an association of restaurants and cloud kitchens that have partnered with Swiggy and Zomato).In its complaint, the NRAI argued that because of their market power, Swiggy and Zomato were unavoidable trading partners for restaurants. While so, the association accused the two food delivery service platforms of indulging in various anti-competitive practices such as:Forcing restaurants to enlist their delivery service, even if the restaurant only wished to be listed on the app (allegation of unfair bundling of services). Data masking as restaurant partners do not receive information available to Swiggy/ Zomato about the customers to whom food is delivered. This means that restaurants are not aware of where the food is delivered, to whom it is delivered or how much time it takes, even though the restaurant would also be held accountable for the food delivery. Since Swiggy and Zomato also list their own cloud kitchens on their platform, there is an inherent conflict of interest created. One-sided and unfair contracts owing to superior bargaining power. Imposing high commission rates leading to less revenue for restaurants. At the same time, increases in discounts has led to increase in restaurant expenses..By an order passed in 2022, the CCI opined that a prima facie case had been made out against Swiggy and Zomato. Therefore, it ordered the DG to investigate the allegations levelled by the NRAI.As part of this probe, Swiggy is stated to have submitted highly confidential information in response to DG's questions between September 2022 and October 2023.In March this year, it was informed that the DG had concluded its probe.Swiggy and Zomato later filed applications for access to the confidential version of the DG’s findings, so that they may be able to better respond to the DG’s findings against them. Meanwhile, the NRAI also sought to get access to the confidential version of the investigation report that concerned both Swiggy and Zomato.On April 24, 24 the CCI passed an order allowing the same. The NRAI representatives, however, had to give an undertaking not to share this information with anyone else and to destroy the said confidential information once the CCI proceedings were over..This directive has now been challenged by Swiggy before the High Court. .As per Swiggy, giving the NRAI access to Swiggy’s confidential information would be against the CCI's own practices and would cause irreparable injury to Swiggy as it includes trade secrets and highly confidential business information.Disclosure of confidential information belonging to Swiggy to a third party would violate the CCI’s obligation to preserve confidential information under Section 57 of the Competition Act, 2002, read with Regulation 35 of the Competition Commission of India (General) Regulations, 2009, Swiggy’s plea said. Swiggy has also expressed apprehensions that the NRAI may disclose Swiggy's commercially sensitive information to third parties which could affect Swiggy's right to carry on its business activities, since it includes business sensitive information..On these grounds, Swiggy has urged the High Court to set aside the CCI's April 24 order.If the information has already been provided to the NRAI, Swiggy has called on the High Court to order NRAI to destroy such confidential records. Swiggy's petition was filed through advocates Anind Thomas, Dharma Tej Koneru, Anandi Kamani, Prashasti Singh, Radhika V, Gautham R, Vinudeep R, Aadith Sridhar, Abhay Shetty and Asiri Raj of AZB & Partners.