On Wednesday, October 19, the Competition Commission of India (CCI) reported that it had penalised the online travel companies— MakeMyTrip Limited and Oyo.
The move came in after the Indian competition regulator probed into a complaint filed by a hotel body in 2019, where the Nasdaq listed MakeMyTrip was accused of giving special preference to Oyo on its site. Both the companies have now been ordered to rectify their market demeanour by the commission. Collectively, they have been charged to pay a penalty of $47 million, which is approximately amounts to 392 crore Indian rupees— where MakeMyTrip and Goibibo merger was fined $27 million and Oyo $20 million. Both the companies are said to be engaged in under the chair commercial agreements.
Later on Wednesday, Oyo acknowledged the directives given by CCI and mentioned that it was underway with the careful assessment of instructions.
In a statement issued by the company, it said, “OYO believes that our business practices and conduct comply with all applicable laws and will take necessary steps to explain our position in the appropriate forums.”
According the complaint lodged by the Federation of Hotel and Restaurant Associations of India (FHRAI), the hotel booking giant MakeMyTrip was blamed to have been partial with OYO— a SoftBank backed company. This strategical partnership between the two companies had limited the market reach of independent hotel chains such as Treebo and Fab Hotels, which were formerly listed on the travel integrator’s platform and enjoyed its services. MMT-Go and Oyo have also been accused of extracting “exorbitant” amounts from these hotels through price parity agreements, while providing huge offers on OYO bookings. This can be seen as an unethical way to gain monopoly in the market.
CCI’s order said, “The Commission is of the view that the commercial arrangement between OYO and MMT-Go which led to the delisting of Fab Hotels, Treebo and the independent hotels, which were availing the services of these franchisers, was anti competitive.” The delisting was done by MMT from its hotel booking portal in 2018.
So far, MakeMyTrip has not commented on the matter. It must be noted that the hospitality service provider company obtained Ibibo Group Holding in 2017.
The CCI has commanded the company to ensure a “fair, transparent and non discriminatory” treatment and give access to “all hotels/ hotel chains, by formulating the platforms’ listing terms and conditions in an objective manner.” The Commission also asked it to change agreements that have anything to do with exclusivity conditions.