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Economy & Business

OYO, MakeMyTrip, GoIbibo penalties largest hospitality win: FHRAI

The Hawk
October20/ 2022

New Delhi (The Hawk): The Federation of Hotel and Restaurant Associations of India (FHRAI) called it "one of the biggest wins for the hospitality industry against the dominance of the aggregators" after the Competition Commission of India (CCI) fined MMT-Go (GoIbibo and MakeMyTrip) and OYO a total of Rs 223.48 crores and Rs 168.88 crores, respectively, on Wednesday for anti-competitive conduct.

Hotel and Restaurant Association of Western India (HRAWI) President Pradeep Shetty responded to the news by saying that an investigation into OYO and Go-MMT had been initiated on the basis of a complaint filed by HRAWI.

It was due to the complaints we submitted with the CCI in 2019 that both Oyo and Go-MMT were being investigated for anti-competitive behaviour. As a result, the CCI decided to look into the commercial dealings of both companies in accordance with Section 26(1) of the Competition Act, 2002. According to a statement released by FHRAI, "Today, the CCI levied penalties of Rs 223 crore and Rs 168 crore on Go-MMT and Oyo for anti-competition practises."

This is a huge victory for the hospitality sector in its fight against the monopoly of aggregators. We also believe this judgement will go far in disciplining the OTAs and rescuing the Industry," it continued.

Hotels of all types and price points have been severely impacted by Go-MMT and Oyo's efforts. Among other unethical business activities, these companies engage in deep discounting, unfair business practises, dominant positioning, and unilateral agreements, according to FHRAI.

According to FHRAI's statement, OYO is "particularly accountable for the systemic pillage of the budget segment hotel company and its market as a way to reach a notional billion-dollar valuation." This raises major issues for our country's hospitality industry. As OYO prepares to go public, we believe this information will be useful to both potential investors and regulators.

Previously, the CCI had ordered MMT-Go to change its market behaviour for engaging in anti-competitive practises.

For abusing its dominating position and also for having anti-competitive agreement with OYO, CCI has imposed financial and behavioural fines on MMT-Go (MakeMyTrip and GoIbibo) (Oravel Stays Ltd).

Due to an anti-competitive agreement with MMT-Go, MMT-Go delisted OYO's competitors from its web portals in 2018, and OYO was fined as a result.

One of the most serious accusations made against MMT-Go is that it imposed a pricing parity on its hotel partners.

In accordance with the terms of such arrangements, the hotel partners may not offer their rooms for sale on any other platform, including their own online portal, at a price lower than that at which it is being sold through the two businesses' respective platforms.

In addition, it was claimed that MMT gave OYO special treatment on its platform, preventing other competitors from entering the market.

(Inputs from Agencies)