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CCI orders detailed probe into anti-competitive allegations against MakeMyTrip and Oyo

The CCI has ordered an investigation into alleged abuse of dominance by MakeMyTrip and Oyo Hotels, on the basis of a complaint filed by Treebo Hotels (operated by Rubtub Solutions Pvt. Ltd.). The antitrust regulator has clubbed this with its October 2019 order for an investigation into whether MakeMyTrip (including Goibibo) were abusing their dominance. The CCI’s probe arm — the Director General — has been ordered to submit a consolidated investigative report on both investigations, without specifying a deadline.

The CCI ordered the probe on three main allegations by Treebo:

  1. Vertical arrangement between MMT and Oyo: Treebo and its partner hotels had to abruptly stop listing on MakeMyTrip, because of a commercial agreement between MakeMyTrip and Oyo — wherein MakeMyTrip agreed to remove Oyo’s competitors, including Treebo, from its platform.
  2. Price restriction: MakeMyTrip imposed price restrictions on Treebo’s partner hotels via a Chain Agreement, under which it disallowed Treebo from listing its properties at cheaper rates on MakeMyTrip’s competitors Booking.com and Paytm. Treebo also had to first provide rooms on MakeMyTrip, only after which it could provide rooms on Booking.com and Paytm.
  3. Exclusivity agreement: MakeMyTrip restricted Treebo from listing its properties on Booking.com and Paytm for 72 hours and 30 days prior to check-in for hotels in 29 cities (Category A) and 25 cities (Category B) cities respectively. These include major cities and tourist destinations, such as Gurgaon, Pune, Mumbai, Kolkata, Hyderabad, Delhi, Goa, Alleppey, Amritsar, among others.

The CCI said that a prima facie case of contravention against MakeMyTrip “for abuse of dominant position under Section 4(2)(a)(i) is made out on account of all the three allegations analysed supra”. Further, a case against MakeMyTrip and Oyo is also prima facie made out “for entering into a vertical arrangement causing an appreciable adverse effect on competition” under the Competition Act.

The CCI had examined similar allegations against MakeMyTrip and Oyo on a complaint filed by Federation of Hotels & Restaurants of India (FHRAI), for which it had ordered an investigation in October 2019. In fact, the CCI said that Treebo’s first two complaints are similar to those examined against Oyo and MakeMyTrip in the October 2019 probe order. The CCI found both players to be dominant, and indulging in abusive practices, including denial of market share via a commercial agreement between them, price and room parity restrictions, predatory pricing, etc.

As for the exclusivity arrangement, the CCI said it prima facie “appears unfair and hence exploitative” for Treebo and its partner hotels as it denies them an opportunity to list on other OTAs and to gain access to them, especially to MMT’s closest competitor Booking.com.

Such restriction also seems to be exclusionary as two OTAs were excluded from listing the Treebo chain of hotels, thus potentially leading to denial of market access for those OTAs with regard to those hotels branded by Treebo.

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