In a manner legitimising the way OYO Rooms has been entering into agreements with its partner hotels, the Competition Commission of India (CCI) has refused to entertain a complaint against the hospitality major. In its order, the CCI has clearly spelt out that in its assessment, OYO cannot be said to be the dominant player in the industry it is operating in.
The crux of the case before the CCI was that OYO misuses its dominant position to make its partner hotels bow to its diktats. With the CCI not accepting the claim that OYO enjoys a dominant status or position, these charges are automatically thrown out the window by the Commission.
The complaint before the CCI was made by RKG Hospitalities Pvt Ltd, a hotel which had entered into the 'Marketing and Operational Consulting Agreement' with OYO. Under this agreement, OYO insists that its brand OYO is prominently displayed on the frontage of the hotel along with the hotelâ€™s name. RKG argued that OYO was gaining popularity for its brand name without spending anything from its end on promotions.
There are also stipulations with regard to changes to be made within the hotels whether hotelâ€™s owners /management think such changes are required or not.
And lastly, the complainant said that OYOâ€™s scoring policy was unfair. RKG Hospitalities wanted the CCI to find OYO in violation of Section 4 of the Competition Act. The section basically deals with abuse of dominant position.
The CCI virtually dismissed each one of these charges made by the complainant. Of course, since the very fundamental accusation that OYO was a dominant player has been found to be not tenable by the competition watchdog, the other charges donâ€™t stand. The CCI however did not overlook these and said these conditions being imposed by OYO under the agreement are meant to ensure that certain quality benchmarks are achieved keeping customer satisfaction in mind.
There have been a couple of other cases earlier as well where the partner hotels have been accusing OYO of a high-handed approach. This ruling by CCI may be a setback to them as well.