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MakeMyTrip in favor of ex-ante regulations but not for online travel market

MakeMyTrip, in its submission, did not provide any reasons as to why it thinks the online travel segment should be exempted. 

MakeMyTrip, in its submission to the Committee on Digital Competition Law (CDCL), said that it is in favour of ex-ante regulations for digital markets in India but “only to the extent that they are made applicable to select large horizontal platforms that have created economy-wide ecosystems”. It has, interestingly, opposed ex-ante regulations for the online travel market, the market in which it operates and holds a significant market share. It did not provide any reasons as to why it thinks the online travel segment should be exempted. 

The comments were made public in the report released by the CDCL regarding ex-ante regulation in India, modelled after the Digital Markets Act (DMA), the EU’s new competition law. The Committee has also released the draft Digital Competition Bill,2024.

The draft bill prohibits large digital platforms, identified as Systemically Significant Digital Enterprises (SSDEs), from engaging in self-preferencing, restricting third-party apps, imposing anti-steering policies, misusing the data of business users, and bundling products and services. The draft is open for public feedback until April 15. 

Ex-ante regulations aim to prevent anti-competitive conduct from occurring, as opposed to the current ex-post framework under the Competition Act, 2002, wherein the Competition Commission of India (CCI) intervenes after the occurrence of anti-competitive conduct.

What else did MakeMyTrip say in its submission?

Criteria used in other markets cannot be applied in India: MakeMyTrip’s submission said that the criteria that call for the imposition of ex-ante regulations in other economies, such as the EU, do not apply to India due to different economic and market conditions.

“Gatekeepers” designation must be at EU thresholds or higher: Under the DMA, certain digital enterprises with significant control over the market are termed “gatekeepers” based on certain quantitative and qualitative criteria. MakeMyTrip suggested that any Indian digital enterprise being designated a “gatekeeper” under Indian regulation, must be at the EU level or higher to protect domestic players who need to compete with global leaders in the Indian market.

MakeMyTrip’s previous anti-competitive practices

The Competition Commission of India (CCI), on 18 October 2022, fined MakeMyTrip and its acquired company Goibibo (MMT-Go) ₹223 crore and imposed behavioural sanctions for anti-competitive conduct. The investigations were based on complaints from 2019 and 2020  filed by the Federation of Hotel and Restaurant Associations of India (FHRAI) and Treebo Hotels, respectively.

The CCI ruled that MMT-Go held a dominant position in the online travel sector and had abused this to its benefit. The CCI agreed with the allegation that MMT-Go did not allow hotels to set a lower price on other platforms including their own website. They also ruled that MMT-Go prevented hotels from using other platforms through exclusivity agreements, thus impeding competition.

The CCI also agreed with the allegation that it misrepresented information, by showing some hotels as “sold out” and noting that this could result in lower revenue and due to their dominant position in the market could “dissuade the consumer from searching on alternative channels for the same hotel.” Further, they ruled that MMT-Go engaged in predatory pricing by providing discounts that were impossible for competitors to offer.

Thus, the CCI ordered MMT-Go to :

  •   Modify their agreement with hotels to remove the price and room availability parity obligations with respect to other online travel aggregators (OTAs) and also the exclusivity conditions.
  •   Provide access to their platform on a fair, transparent and non-discriminatory basis to all hotels and hotel chains by formulating objective listing terms and conditions
  •   Provide transparent disclosures on their platform as to why properties are not available especially when the reason is either that the contract with the hotel is terminated or because of the exhaustion of quota allocated to MMT-Go by the hotel

Booking.com could be designated as a gatekeeper in the EU

The European Commission is deliberating on whether online travel website Booking.com, must be designated as a “gatekeeper” in the EU. If it is, ex-ante regulations under the Digital Markets Act will apply to Booking.com in the EU. Similar regulations would apply to MakeMyTrip, if the Digital Competition Bill, 2024 were to be enacted in India and if MakeMyTrip is designated as a Systemically Significant Digital Enterprise.

 Also Read:

  • Why The Indian Government Is Exploring Ex-Ante Regulations For Digital Markets 
  • Amazon And Flipkart Oppose Ex-Ante Competition Regulations In India
  • Summary: India’s Draft Digital Competition Bill, 2024

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