The Competition Commission of India (CCI) on Wednesday imposed penalties of Rs 392 crore on online travel companies MakeMyTrip, Goibibo, and hospitality services provider Oyo for unfair business practices. A penalty of Rs 223.48 crore has been imposed on Make My Trip-Goibibo (MMT-Go) and Rs 168.88 crore on Oyo, according to a 131-page order.
The CCI said that MMT-Go imposed price parity in their agreements with hotel partners. Under such contracts, the hotel partners are not allowed to sell their rooms on any other platform or on their own online portal at a price below the price at which it is being offered on the two entities’ platforms. The regulator said it has found that deep discounts and parity conditions together have created an ecosystem that reinforces MMT-Go’s dominant position in the relevant market.
It also said that MMT gave preferential treatment to Oyo on its platform, further leading to a denial of market access to other players.
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The regulator has directed MMT-Go to “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 CCI has also directed it to modify agreements to do away with certain exclusivity conditions.
“MMT-Go is directed to provide access to its platform on a fair, transparent, and non-discriminatory basis to the hotels/chain hotels, by formulating the platforms’ listing terms and conditions in an objective manner,” the order stated.
The regulator ordered a detailed investigation into the matter in October 2019.
The Federation of Hotel & Restaurant Associations of India (FHRAI) had also said that there are agreements between Oyo and MakeMyTrip due to which they give preferential treatment to Oyo on its platform, and restrict other market players like Fab Hotels and Treebo.
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MakeMyTrip was founded by Deep Kalra in 2000. It acquired Ibibo Group Holding in 2017. MMT operates its hotels and packaged business under MMT India, and Ibibo India under the brand name Goibibo.