The Competition Commission of India (CCI) has directed online travel platform MakeMyTrip (MMT) to relist the properties of Treebo and FabHotels in four weeks time. This came after both MMT and Oyo conveyed that they had no objections to relisting the properties, according to an ET report.
However, CCI is yet to pronounce its final order over allegations that MMT abused its dominant position in favour of OYO.
The scuffle between MMT, OYO and the branded hotel chains originally began in April 2018, when MMT had delisted both Treebo and FabHotels from its portal, after partnering exclusively with OYO for hotel listings. That partnership essentially denied both Treebo and FabHotels access to a large share of the market.
It is important to note that after CCI’s direction providing relief to Treebo and FabHotels came out in March, MMT had appealed that decision before the National Company Law Appellate Tribunal (NCLAT) while OYO had moved Gujarat HC in the same month, seeking a stay on the CCI order.
In its March 9 interim order, the CCI had said the conduct of MMT-GO (MakeMyTrip and Goibibo) in delisting franchisee service providers, specifically Treebo and FabHotels, had affected competition in the market by denying access to an important channel of distribution through foreclosure.
However, on a plea submitted by OYO, a Gujarat HC bench headed by Chief Justice Vikram Nath set aside the March 10 CCI order which ruled favorably for FabHotels and Treebo. OYO had filed a petition against the CCI order arguing that the order was passed without giving an opportunity to the company to be heard and was in violation of the principles of natural justice.
A two-bench court on June 15 set aside an earlier competition commission of India (CCI) order which granted relief to branded hotel chains FabHotels and Treebo in a case where India’s largest online travel aggregator (OTA) MMT was accused of unfair trade practices.
MMT And OYO Vs Treebo And FabHotels
In February 2020, Treebo Hotels, cofounded by Sidharth Gupta, and Rahul Chaudhary approached India’s competition regulator with a complaint that sent shockwaves down the travel market.
According to the complaint filed with the CCI on February 24, 2020, Treebo alleged that online travel aggregator MakeMyTrip and their (Treebo’s) competitor OYO have together indulged in anti-competitive practices. Treebo’s competitor FabHotels, had also petitioned in the CCI a month before Treebo’s complaint.
Both Treebo and FabHotels work on a franchise model similar to OYO, wherein a hotel property is taken over by them. Under the franchise agreement, these players standardise the rooms to their requirements and sell them directly on OTAs and on their own websites.
After a year-long probe into the complaints, CCI had held in the March 10 direction that MakeMyTrip in fact may have indulged in discriminatory practices by delisting the budget hotel chains back in 2018. The CCI also found that FabHotel and Treebo were in fact competitors to Oyo, and by forcibly delisting the former brands, MakemyTrip disrupted fair competition in the market.