The Competition Commission of India (CCI) allowed FabHotels to implead into its investigation against hotel aggregators OYO and MakeMyTrip (MMT) after a complaint by the Federation of Hotel and Restaurant Associations of India (FHRAI).
The matter dates back to October 2019, when FHRAI filed a complaint with the CCI against OYO and MMT over abusing dominance and competitive pricing.
FabHotels filed an impleadment application last month with the CCI, and stated that it sought to implead into the matter because it has substantial interest in how the proceedings pan out.
In April 2018, the Economic Times reported that OYO and MMT had reached an agreement where they would not list — or delist — all properties of FabHotels and Treebo from their platforms. This came after the two partnered up, which they said would add momentum to India’s rapidly growing travel sector.
In its order approving FHRAI’s impleadment petition, the CCI said that it had observed that one of the main issues under investigation was the “alleged denial of market access to the competitors of OYO consequent to the commercial agreement between MMT and OYO.”
In a prima facie order of October 2019, the CCI observed that MMT and OYO giving each other preference on their platforms leads to denial of market access.
“Apparently, Fab Hotels operate in the same relevant market and is thus, competitor of OYO In the said order, the Commission also observed that 1from the search results presented by MMT on random queries for hotels across different locutions, it appears that Fab Hotel and Treebo are indeed not present on this platform, while they earlier used to be. The Commission opined that if this is a consequence of an agreement between MMT and OYO,” it stated.
This, the order stated, in not listing the closest competitors of OYO could potentially be in contravention of provisions of Section 3(4) of the Competition Act, 2002.
In a statement, Vice-President of the FHRAI Gurbaxish Singh Kohli stated that their position stands vindicated.
“Our position now stands vindicated with FabHotels confirming that barriers were imposed by MMT and OYO as part of their tacit agreement to ultimately deprive public and other hotel players fair and equal access. MMT has abused its dominant position by imposing unfair trade terms and conditions on Fab hotels and Treebo Hotels, subsequently de-listing the two from its online portal,” he said.
This comes at a time that many hoteliers are disgruntled with OYO, and have accused it of predatory pricing, exorbitant commissions and more.
“We will be shortly submitting more evidence of dominance and misdemeanors on part of MMT and OYO to the CCI investigation team. We will highlight the illegal actions of these aggregators in the evolving online and digital age, whereby local entrepreneurs and hotels are being destroyed by OTAs [online travel aggregators] who are funded by foreign funds only for their mutual benefit,” said Pradeep Shetty, the Joint Honorary Secretary of FHRAI.