The Competition Commission of India (CCI) has stated in an order dated October 28 that there is a prima facie case for investigation against online travel agents MakeMyTrip-Goibibo and hospitality services provider Oyo for alleged violations of the Competition Act. The order is in response to a complaint filed by the Federation of Hotel & Restaurant Associations of India (FHRAI). Following a complaint from the Federation of Hotel & Restaurant Associations of India (FHRAI), the watchdog concluded that “prima-facie” there are violations of competition law.
The Competition Commission of India (CCI) assessed the allegations on the basis of two relevant markets for the case,. In the case of Make My Trip-GoIbibo (MMT-Go), it is the ‘market for online intermediation services for booking of hotels in India’ and for OYO, it is the ‘market for franchising services for budget hotels in India’.
In a 26-page order, the fair trade regulator said there exists a prima-facie case for investigation against MMT-Go and OYO for alleged violation of the provisions of Section 3(4) of the Competition Act. This section pertains to anti-competitive agreements.
A prima facie case for investigation under Section 4 of the Act, which deals with abuse of dominant position, has also been made out against MMT-Go. The CCI has sought a report on the investigation within 150 days.
FHRAI has alleged hospitality players Treebo and Fab Hotels have been denied market access and have been allegedly removed from the platform of MMT-Go as they did not agree to pay the exorbitant commission brokerage charged by the latter. since MMT-Go has been found to be dominant, they need to be investigated.
The allegation also states that MMT and OYO have entered into confidential commercial agreements wherein MMT has agreed to give preferential treatment to OYO on its platform, further leading to a denial of market access to Treebo and Fab Hotels.
It has been pointed out that MMT charges a service fee from the consumer at the time of booking the rooms in the name of the hotels, which is pocketed by MMT. Since MMT is prima facie found to be dominant, this conduct of MMT merits investigation, the order said.
