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OYO

CCI refutes case against OYO regarding abuse of dominance

OYO

Competition Commission of India has dismissed a case against OYO parent Oravel Stays Pvt Ltd that alleged the hospitality firm’s involvement in unfair business practices.

The complaint was filed by New Delhi-based RKG Hospitalities which had entered into a ‘Marketing and Operational Consulting Agreement’ with OYO during 2017.

It also alleged that the clauses in the agreement were one-sided, unfair and discriminatory because of  OYO’s dominant position.

CCI in its order considered the ‘market for franchising services for budget hotels in India’ as the relevant one and refuted any violation of provisions of Section 4 that defines abuse of dominant position in the relevant market.

Regarding policy and usage of signage of OYO brand with complainant’s hotel name, CCI clarified that clauses are justified to ensure quality service and customer satisfaction.

The decision comes amidst multiple cases against the Softbank-backed company with many alleging it for providing deep discounting, high commissions, and frequent changes in the arbitrary contract.

Recently, the Federation of Hotels and Restaurant Association of India (FHRAI) had registered a complaint against OYO to CCI over imposing unfamiliar charges on partner hotels on an ad hoc basis for the last two months.

The hearing of the case is scheduled on August 6.

OYO, however, has been denying such allegations and even warned to take legal action against such association and individual who are threatening to cancel agreements and not accept online bookings as it is a violation of the contractual arrangements made between the two parties.

The Delhi High Court had also come with a relief for OYO by restraining various hoteliers welfare associations from issuing any notices or boycotting and banning the Ritesh Agarwal-led firm.

The development was reported by ET.

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