Anti-trust watchdog the Competition Commission of India (CCI) has imposed monetary as well as non-monetary sanctions on MakeMyTrip, GoIbibo, and OYO for indulging in anti-competitive conduct. The fair trade regulator has slapped a fine of ₹223.48 crore on the Nasdaq-listed MakeMyTrip-Goibibo (MMT-Go) and ₹168.88 crore on OYO (Oravel Stays Limited) for abusing their dominant position and also for having anti-competitive arrangement.
“Monetary penalty is also imposed on OYO for its anti-competitive arrangement with MMT-Go vide which MMT-Go delisted the competitors of OYO from its online portals in 2018,” the CCI said in a 131-page order on Wednesday.
The regulator said that it carried out an in-depth analysis for delineation of relevant market, laying special emphasis on such assessment in case of platform markets. Based on an in-depth assessment, the agency found that the deep discounts and parity conditions created an ecosystem that reinforced MMT-Go’s dominant position in the relevant market.
Commenting on the role of interdependencies in two-sided or multi-sided markets, the CCI said, “It is important to understand the nature of the interaction and interdependencies between the different sides of a multi-sided platform so as to ascertain the impact of such interaction or interlinkages in the analysis”.
With regards to dominance, the CCI said it considered various factors related to the dynamic nature of the market under consideration and found MMT-Go to be holding a dominant position in the market for online intermediation services for booking of hotels in India during the period of inquiry, i.e. 2017-2020.
On the allegation pertaining to misrepresentation of information by MMT-Go for showing certain hotels as ‘sold out’ on its portals while the same were only delisted and may have had available rooms for booking, the CCI observed that MMT-Go is a dominant player in the relevant market and consumers heavily rely on results being shown on MMT-Go’s website.
“Any such misrepresentation of information on MMT-Go’s platform could affect the perspective of the consumer and may dissuade the consumer from searching on alternative channels for the same hotel, under the assumption that the hotel is sold out. This could result in lower number of room bookings of the hotel partner and also reduce the competition amongst the budget hotels registered on different OTAs, thereby leading to exclusion of such hotels, besides this act of misrepresentation being exploitative in nature as regards such hotels,” it added.
In a bid to ensure an environment that supports fair competition, the CCI has directed MMT-Go to modify its agreement with hotels to remove or abandon the price and room availability parity obligations with respect to other online travel agents OTAs and also the exclusivity conditions that exist in the form of D-minus clause.
Besides, MMT-Go has been directed to provide access to its platform on a fair, transparent and non-discriminatory basis to the hotels, by formulating the platforms’ listing terms and conditions in an objective manner. It has also been asked to provide transparent disclosures on its platform as regards the properties not available on its platform, either on account of termination of the contractual arrangement with any hotel or by virtue of exhaustion of quota allocated to MMT-Go by such hotel.
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