NEW DELHI: The Competition Commission of India (CCI) has levied a penalty of Rs 223.5 crore on MakeMyTrip India-Ibibo (MMT-Go) for abuse of its dominant position in online travel booking space and entering into an anti-competitive tie-up with OYO, a low-cost hotel chain group.
The competition watchdog has also levied a Rs 169 crore penalty on OYO. Apart from the penalty, the CCI also directed MMT-Go to modify its agreement with hotels to remove the price and room availability parity obligations with respect to other online travel portals.
The CCI had initiated an investigation against the two – MMT-Go and OYO -- following separate complaints filed by the Federation of Hotel & Restaurant Associations of India (FHRAI), a representative body of the hospitality industry in India, and two budget hotel brands FabHotels and Treebo Hotels.
The complainant had alleged that MMT-Go had imposed price parity in its agreement with hotel partners, whereby the hotel partners were not allowed to sell their rooms at any other online travel portals or on its own portal at a price below which it is being offered on MMT-Go’s platform. Though MMT-Go could change the prices at its discretion.
The hotel owners had also alleged MMT-Go for indulging in predatory pricing by offering hotel rooms at less than the average room rate. According to the complaint, MakeMyTrip was offering deep discounts to customers, forcing out smaller travel portals.
MMT-Go is said to be charging exorbitant commissions in the range of 22-40 per cent from hotels. It was also said in the complaint that Treebo and FabHotels were denied market access because of their removal from MMT-Go as they refused to pay exorbitant commissions.
MMT-Go and OYO allegedly entered confidential pacts wherein MMT-Go had agreed to give preferential treatment to OYO. An MMT-GO spokesperson said the firm anticipates negative impacts of the order on the level of competition and growth of the e-commerce market in India.
The firm hinted at moving to the NCLAT against the CCI order. An OYO spokesperson told this newspaper they are reviewing the order in detail. Meanwhile, FHRAI executive panel member Pradeep Shetty has said this is by far one of the biggest wins for the hospitality industry against the dominance of the aggregators.