
The Competition Commission of India (CCI) on Wednesday imposed monetary penalties of Rs 223.48 crore on MakeMyTrip-Goibibo (MMT-Go) and Rs 168.88 crore on OYO (Oravel Stays Limited) for indulging in unfair business practices in the hotel segment.
The CCI, in a 131-page order, said that it has carried out an in-depth analysis for delineation of relevant market, laying special emphasis on such assessment in case of platform markets.
The fair-trade regulator said that after examining the parity obligation vide which MMT-Go was imposing wide price parity as well as room availability parity obligations on its hotel partners, it has found that the deep discounts and parity conditions together has created an ecosystem that reinforces MMT-Go’s dominant position in the relevant market.
It added that these conditions help MMT-Go to retain and further increase its network of users, who are increasingly dependent on the platform for availing of the best deals.
Secondly, it impedes the competitive process between OTAs by limiting the competitive levers/instruments at the disposal of other portals that, for instance, cannot get better prices from hotels by offering lower commission rates.
As part of its non-monetary sanctions, the CCI directed MMT-Go to amend its market behaviour and, in particular, modify its agreements with hotels/chain hotels so as to remove/ abandon the price and room availability.
It observed in absence of these measures, any misrepresentation of information on MMT-Go’s platform could affect the perspective of the consumer and may dissuade the consumer from searching on alternative channels for the same hotel. This could result in a lower number of room bookings of the hotel partner and also reduce the competition among the budget hotels registered on different Online Travel Agencies (OTAs).
"Suitably modify its agreements with hotels/chain hotels to remove/abandon the price and room availability parity obligations imposed by it on its hotel/chain hotel partners with respect to other OTAs (Online Travel Agencies)," the order stated.
The fair-trade regulator has also accused Nasdaq-listed MMT of favouring OYO on its platform, further leading to a denial of market access to other players. The Federation of Hotel and Restaurant Associations of India has said that there are agreements between Oyo and MakeMyTrip due to which they give preferential treatment to Oyo on its platform, and restricting peer players like Fab Hotels and Treebo.
MakeMyTrip.com was founded in the year 2000 by Deep Kalra. In 2017, MMT took over Ibibo Group Holding, and operates its hotels and packages business through MMT India under the brand name MakeMyTrip.