CCI directs fresh investigation against OYO and MMT over Treebo’s allegations

Acting on the complaints by Treebo Hotels, the Competition Commission of India has ordered an investigation against MakeMyTrip (MMT) and OYO.

“The Commission is of the view that prima facie a case of contravention against MMT for abuse of dominant position under Section 4(2)(a)(i) and 4(2)(c) is made out on account of all the three allegations analysed supra,” the regulator body said in a circular.

The order came after Rubtub Solutions Pvt. Ltd., which runs under the brand name of Treebo Hotels, in a complaint alleged that MMT abused its dominant position and entered into anti-competitive exclusive agreements with OYO.

According to the CCI observation, Treebo’s allegations centred around three major issues.

First, Treebo and its partner hotels are being excluded from listing on MMT’s platform through abrupt termination- under the commercial, an arrangement between MMT and OYO.

Second, MMT, as a dominant player, imposed ‘price parity restriction’ on Treebo partner hotels through the Chain Agreement, which restricted it from providing its properties to Booking.com and Paytm (MMT’s competitors) at a better price.

And third MMT imposed an ‘exclusivity condition’ on Treebo through ‘Exclusivity Agreement’ which restricted it from listing its properties on Booking.com and Paytm (MMT’s competitors) for a period of 72 hours and 30 days before check-in for hotels situated in Category A and Category B cities, respectively.

Treebo also alleged that due to OYO and MMT agreement, MMT refused to list hotels which had partnered with the Bengaluru-based firm. In 2018, Treebo’s agreements were terminated by MMT as a result of OYO’s agreement with MMT wherein MMT agreed to remove OYO’s competitors like Treebo from its platform.

The CCI had examined some of these allegations against MMT and OYO specifically in an information filed by Federation of Hotel & Restaurant Associations of India (FHRAI), which is ongoing.

In October last year, the regulator had ordered a probe after the industry body FHRAI alleged anti-competitive behaviour by OYO and Go-MMT.

At that time, CCI had observed that by not closest competitor listing FabHotels and Treebo following an agreement between Oyo and MMT potentially contravene the provisions of the Competition Act 2002.

Last month, FabHotels filed for impleadment in the matter alleging that the partnership between OYO and MMT created entry hurdles for the competitors. On Feb 5, the CCI approved its impleadment application and made a party in the FHRAI-GO-MMT-OYO matter.

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CCI directs fresh investigation against OYO and MMT over Treebo’s allegations

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