Two Indian food delivery unicorns are being investigated for alleged unfair business practices, the country’s antitrust watchdog has said.
Zomato and Swiggy dominate the fast-growing market in India with a combined share of 95%.
The order to investigate the firms has come months after the National Restaurant Association of India (NRAI) filed a complaint.
The companies have not commented on the investigation.
However, the firms had reportedly denied the allegation when the NRAI filed the complaint to the Competition Commission of India (CCI) in July last year.
The NRAI, which represents more than 500,000 restaurants across India, had asked the CCI to investigate the two companies for allegedly providing priority to some eateries.
The association has also alleged that the two companies provide discounts after charging “exorbitant commissions” from restaurants.
It added that the commissions were too high for restaurants to sustain.
The CCI said the firms’ agreements with restaurants could create “entry barriers for new platforms, without accruing any benefit to the consumers”.
Swiggy, backed by SoftBank, raised $700m in funding earlier this year, doubling its valuation to $10.7bn. Zomato, which went public last year, attracted bids worth $46.3bn and it was more than 38 times oversubscribed.
The two firms are among some of the fastest-growing start-ups in India, which has been producing unicorns, private firms valued at over $1bn (74.5bn rupees), at a rapid pace.