Indian Government vs. Big Corporations: The Battle for Fair Markets

 

Introduction

India’s top quick-delivery companies—Zomato, Swiggy, and Zepto—are facing an investigation by the Competition Commission of India (CCI). The government is looking into claims that these companies are using unfair pricing strategies to dominate the market.

Small shop owners and product distributors say that these platforms offer extremely low prices, making it hard for local businesses to compete. With India’s quick-commerce market expected to reach $35 billion by 2030, this investigation could bring big changes to the industry.

Why Are These Companies Under Investigation?

                              

Some business owners believe that Zomato, Swiggy, and Zepto are using their financial power to harm competition. Their main concerns include:

1. Selling Below Cost: These companies offer big discounts, sometimes selling items at a loss to attract more customers.


2. Exclusive Deals: They may have special partnerships with big brands, making it harder for smaller stores to get the same products at good prices.


3. Controlling the Market: If small businesses shut down due to these practices, these platforms might later raise their prices without competition.

How Does This Affect Small Businesses?

Local shops and grocery stores struggle to compete with the low prices offered by these online platforms. While customers enjoy cheaper prices, small business owners worry that they will lose customers and may even have to close their shops.

What Will the Government Do?

The CCI will check if these companies are breaking competition laws. If found guilty, they could face large fines and new rules to prevent unfair pricing.

In the past, the CCI has acted against companies like Amazon and Flipkart for similar issues. This case will show how serious India is about ensuring fair business competition.

What Happens Next?

Zomato, Swiggy, and Zepto deny any wrongdoing. They say their pricing is fair and benefits customers. Experts believe stricter rules may be introduced to stop companies from unfairly lowering prices. Quick-commerce companies might have to change their pricing strategies to stay in business.

Here are some real-life examples that students can relate to while understanding the concepts in this article:

1. Unfair Pricing in E-Commerce

Example: Amazon and Flipkart’s Discounts

In 2021, the Competition Commission of India (CCI) investigated Amazon and Flipkart for offering huge discounts on mobile phones and electronic products. Small retailers complained that these companies had exclusive deals with phone brands and were selling products at very low prices, making it hard for local stores to compete.

Lesson: Governments step in when big companies use their financial power to dominate markets unfairly.

2. Small Business Struggles Against Large Corporations

Example: Kirana Shops vs. Big Supermarkets

Small kirana (local grocery) stores in India struggle to compete with large supermarkets like Reliance Fresh and Big Bazaar.

Supermarkets buy goods in bulk at lower prices, allowing them to sell products cheaper than small stores.

As a result, many small shops lose customers and may be forced to shut down.

Lesson: Businesses must adapt to market changes, and governments may introduce policies to support small retailers.

3. Predatory Pricing and Its Consequences

Example: Ola and Uber’s Pricing Strategy

When Ola and Uber entered the Indian market, they offered very low fares and big discounts to attract customers.

Many local taxi services and auto drivers lost their income because they could not compete with such low prices.

Once Ola and Uber gained market control, they increased fares, and drivers started facing problems like low earnings and higher commissions.


Lesson: Predatory pricing can hurt both small businesses and consumers in the long run.


4. Government Action Against Big Companies

Example: Google’s Fine for Unfair Practices

In 2022, the CCI fined Google ₹1,337 crore for abusing its dominant position in the smartphone market.

Google forced smartphone companies to pre-install its apps (like Google Search and Chrome), preventing fair competition.


Lesson: Even big global companies must follow fair competition rules, or they face penalties.

5. Impact on Consumers

                               

Example: The Rise of Quick-Commerce (Blinkit, Zepto, etc.)

Apps like Blinkit, Zepto, and Swiggy Instamart deliver groceries in 10–20 minutes.

This is convenient for customers, but local grocery stores are losing business as people prefer ordering online.


Lesson: While technology improves convenience, it also changes traditional businesses, and small retailers must adapt to survive.

What Students can learn from the article.

Students can learn several important lessons from this article, including:

1. Understanding Competition and Fair Business Practices

Businesses must follow fair pricing rules to ensure healthy competition.

Companies that use unfair pricing strategies (like selling at a loss to eliminate competition) can face government action.


2. Role of Government in Protecting Businesses

The Competition Commission of India (CCI) works to prevent big companies from using unfair practices.

Governments create rules to protect small businesses and maintain market balance.


3. The Growth of Quick-Commerce Industry

India’s quick-commerce industry is expanding and expected to reach $35 billion by 2030.

Online platforms like Zomato, Swiggy, and Zepto are changing the way people shop.


4. Challenges Faced by Small Businesses

Small shops struggle to compete with large companies offering discounts.

Traditional businesses must find new ways to attract customers and survive in the digital era.


5. Consumer Perspective – Benefits vs. Risks

Customers enjoy low prices and fast deliveries.

However, if small businesses shut down, online platforms may later increase prices, reducing choices for consumers.


6. Careers in Business, Law, and Economics

Students interested in business, law, or economics can learn how companies operate and how laws regulate them. Understanding market strategies and competition laws can help in careers like corporate law, business management, finance, and policymaking.