India’s anti-trust regulator has ordered a fresh investigation into complaints that hotel-booking company MakeMyTrip (MMT) indulged in anti-competitive unilateral practices and, entered into exclusive agreements with the hospitality chain Oyo excluding rival Online Travel Aggregators (OTAs) and other hospitality chains such as Treebo and FabHotels, potentially stifling competition in the industry.
The Competition Commission of India (CCI) has found that there is a “prima facie case” for investigating allegations that MMT abused its dominant position and entered into anti-competitive exclusive agreements with SoftBank-backed Oyo in contravention of competition laws, it said in an order dated February 24.
Noting the similarity of allegations with a complaint filed by an industry body, the Federation of Hotel and Restaurant Associations of India (FHRAI), the CCI has clubbed the two complaints together and directed the Director General to submit a consolidated report. In October 2019, the CCI had directed the DG to investigate the complaints made by FHRAI against MMT and Oyo. The FHRAI said agreements between Oyo and MMT, a Nasdaq-listed company, were restricting market access to Indian hotel chains such as Fab Hotels and Treebo.
According to the CCI order, the Treebo complaint centres on three issues. One, Treebo and its partner hotels are being excluded from listing on MMT’s platform through abrupt termination owing to the commercial arrangement between MMT and OYO. Two, MMT, as a dominant player, imposed ‘price parity restriction’ on Treebo partner hotels through a so-called Chain Agreement, which restricted it from providing its properties to Booking.com and Paytm (MMT’s competitors) at a better rate/price. Three, MMT imposed an ‘exclusivity condition’ on Treebo, which restricted it from listing its properties on Booking.com and Paytm for of 72 hours and 30 days prior to check-in for hotels situated in Category A and Category B cities, respectively.
These appear to be in contravention of competition laws, the CCI found.
Oyo denies any exclusive arrangement with MakeMyTrip, questions hotel associations’ motivation behind complaint
First Published: Feb 24, 2020 7:00 PM IST
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