The Competition Commission of India (CCI) is unlikely to intervene on pending complaints against quick commerce platforms. 

It sees the market as highly competitive and still evolving, therefore precluding immediate regulatory action, sources said.

The All India Consumer Products Distributors Federation (AICPDF) on Wednesday reiterated concerns about predatory pricing by quick commerce platforms such as Zepto, Blinkit and Swiggy’s Instamart. There is already a pending complaint from AICPDF, which was forwarded by the Department for Promotion of Industry and Internal Trade (DPIIT) to the CCI.

AICPDF has raised alarm over alleged predatory pricing practices threatening the survival of Kirana stores.

Hyper-Competitive Landscape

The quick commerce sector has seen a rapid proliferation of players, creating a fiercely contested market. In addition to existing giants like Blinkit, Swiggy’s Instamart and Flipkart Minutes, Amazon is reportedly set to enter the space under the banner “Tez,” further intensifying competition. 

The CCI, which evaluates anti-competitive practices under the framework of the Competition Act of 2002, typically refrains from action in the absence of market dominance.

“The presence of multiple players in quick commerce ensures that no single platform holds significant market power to dominate or dictate prices. This evolving market dynamic is inherently competitive, leaving little room for intervention under current competition law provisions,” sources said.

Parallels with Jio’s Market Entry

AICPDF has accused platforms like Zepto of selling products at up to 25 per cent below the Maximum Retail Price (MRP), a strategy it claims amounts to predatory pricing. However, the CCI’s past stance on similar cases, such as the entry of Jio into the telecom market, sets a precedent. 

At that time, the Commission refrained from action, reasoning that Jio’s pricing strategies were a result of competition rather than dominance. “Without market dominance, predatory pricing provisions under the Competition Act do not apply,” the sources added.

Foreign Funding and Ownership Concerns

AICPDF has also raised concerns about the foreign ownership structure of platforms like Zepto, citing its heavy reliance on foreign funding, with reports suggesting a 70 per cent stake held by foreign investors upon its anticipated $10 billion IPO. However, regulatory experts point out that ownership patterns alone do not breach competition law unless accompanied by anti-competitive behaviour or misuse of market power.

“The concerns about foreign funding, while valid from an economic sovereignty perspective, fall outside the purview of the CCI,” an industry expert noted. “Such issues require a policy-level review by the Commerce Department rather than intervention under competition law.”

Samir Gandhi, Co-Founder and Partner of Axiom5 Law Chambers, said that the CCI has consistently focussed on examining complaints from the lens of competition law and has quite correctly steered away from examining foreign investment issues.” The government may examine violations of FEMA regulations through other agencies. The Competition Act is not intended or designed to address foreign investment issues,” he said. 

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