MakeMyTrip, OYO fined Rs 392 crore by CCI
text_fields
MakeMyTrip India-Ibibo (MMT-Go) was fined Rs 223.5 crore by the Competition Commission of India (CCI) for abusing its dominant position in the online travel booking market and for forming an anti-competitive alliance with the low-cost hotel chain company OYO.
Additionally, OYO was fined Rs 169 crore by the competition watchdog. In addition to the fine, the CCI ordered MMT-Go to change its contracts with hotels to remove the price and room availability parity obligations with respect to other online travel portals.
Following separate complaints made by the Federation of Hotel & Restaurant Associations of India (FHRAI), an organisation that represents the Indian hospitality sector, and two low-cost hotel chains, FabHotels and Treebo Hotels, the CCI opened an investigation against the two, MMT-Go and OYO, NIE reported.
The complainant claimed that MMT-Go had imposed price parity in its contract with hotel partners, prohibiting the hotel partners from selling their rooms for less than what was being charged on MMT- Go's platform, at any other online travel agencies or on their own portal. Although MMT-Go reserves the right to alter the prices at any time.
Additionally, the hotel owners claimed that MMT-Go engaged in predatory pricing by providing hotel rooms for less than the standard cost. The complaint claimed that MakeMyTrip was driving smaller travel portals out of business by giving customers substantial discounts.
According to reports, MMT-Go charges hotels hefty commissions in the amount of 22-40%. The complaint also claimed that Treebo and FabHotels were denied access to the market as a result of being removed from MMT-Go because they refused to pay excessive commissions.
According to reports, MMT-Go and OYO entered into secret agreements whereby MMT-Go promised to treat OYO preferentially. A representative for MMT-GO stated that the company expects the order to have a negative impact on the degree of competition and the expansion of the Indian e-commerce market.
The firm made a suggestion that it will appeal the CCI order to the NCLAT. A representative for OYO told NIE that they are carefully evaluating the directive. According to Pradeep Shetty, a member of the FHRAI executive panel, this is by far one of the largest victories for the hotel industry over the aggregators' dominance.
