OYO and MakeMyTrip’s Clash with CCI
Last week, both entities, MakeMyTrip Pvt. Ltd. and Oravel Stays Pvt. Ltd. (OYO) were fined two hundred and twenty-three crores and one hundred and sixty-nine crores respectively.
The narrative began in 2019 when MMT-Go (the combined company of MakeMyTrip-GoIbibo) and OYO were brought before the Competition Commission of India (CCI) by FHRAI (Federation of Hotel & Restaurant Associations of India), Treebo, and FabHotels. They charged MakeMyTrip with conspiring with OYO, abusing their market power, and setting prices.
The allegations that were of main concern are:
Price parity was mandated by MMT-Go in its contract with lodging partners. Therefore, it was prohibited for companies like Treebo and FabHotels to list one of their properties for less on their own website or with another aggregator.
In an effort to dominate the online travel agency (OTA) sector, MMT-Go engaged in “predatory pricing,” or giving incredibly steep discounts on accommodation rates.
Additionally, MMT-Go gave OYO special treatment and forbade FabHotels and Treebo from using India’s largest OTA platform.
Let us begin to highlight at least the most interesting parts of the 131-page order:
Is MMT a dominant force?
First off, keep in mind that if the complainants can’t prove that MMT-Go is the market leader, then none of these accusations will count very much. After all, if you aren’t the dominant player in the market, you can’t really misuse your position of power.
Here is MMT’s perspective, though. They thought both online and physical channels should be included in the overall market. Additionally, they thought it ought to incorporate Search, Discover, and Book (SCB) tools like Google as well as direct hotel websites. They wanted the CCI to take everything into account when determining this market’s relevance overall.
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