Zomato has removed a controversial pricing clause from its restaurant contracts following sustained opposition from industry bodies and restaurant partners, according to a source familiar with the matter.
The clause, known as the “price parity” provision, allowed the platform to penalize restaurants if they offered lower prices for dine-in or direct orders compared to listings on the app. Contracts reviewed earlier indicated that penalties could be as high as three times the price difference per order, with compliance monitored through methods such as mystery audits.
While the clause was reportedly never enforced, it has now been dropped entirely. The company has not publicly commented on the decision.
The move comes after objections from the National Restaurant Association of India (NRAI), which argued that such provisions restricted restaurants’ ability to independently determine pricing. NRAI President Sagar J. Daryani welcomed the development, stating that pricing decisions should remain with restaurant operators.
Legal experts had also flagged potential antitrust concerns, noting similarities with clauses previously challenged in India’s online travel sector. In 2022, platforms such as MakeMyTrip and GoIbibo were directed to remove similar restrictions following regulatory scrutiny.
Zomato’s policy change comes amid increased attention on competition practices in India’s fast-growing food services market, estimated to expand from $94 billion to $153 billion by 2031. The platform, operated by Eternal, currently serves around 24 million users and partners with over 300,000 restaurants across the country.