SUMMARY
Treebo said that the MakeMyTrip and OYO partnership is creating a negative impact on the industry
Treebo has alleged that MakeMyTrip is not listing Treebo hotels on the platform
CCI said that it is investigating a vertical arrangement of MakeMyTrip and OYO
After ordering an investigation into the businesses of ecommerce companies, the Competition Commission of India (CCI) has now ordered a probe against hospitality players MakeMyTrip and OYO for their partnership which is harming the businesses of other companies in the space.
According to ET, a case was filed by Treebo’s parent company Rubtub Solutions, which runs the Treebo hotel chain, one of OYO’s rivals in India. Treebo has alleged that as a result of MakeMyTrip’s partnership with OYO, the online travel aggregator is not listing Treebo and its partner hotels on the platform. Treebo’s complaint also said that OYO has abused its dominant position by entering into an anti-competitive vertical arrangement with MakeMyTrip.
Treebo has also alleged that MakeMyTrip has also put price parity restrictions on the platform. According to Treebo, the agreements restrict its hotels from providing a better price on Booking.com, Paytm and other platforms.
Moreover, Treebo has also said that MakeMyTrip also blocked its listings on Booking.com and Paytm for 72 hours and 30 days respectively. These restrictions were put on Treebo under an exclusivity agreement, the company added.
In its 13-page order, CCI has said that it is investigating a vertical arrangement of MakeMyTrip and OYO which is having an adverse effect on the competition in the market. CCI said that the allegations have raised concerns related to the dominating position of MakeMyTrip.
In response to these allegations, CCI said that they appear to be unfair and ‘explorative’ for Treebo and its partner hotels. These restrictions deny Treebo with an opportunity to list their hotels on other online hotel booking platforms, CCI added.
In another probe case which was ordered in October 2019, the CCI is examining hoteliers’ complaints against three big players in the hospitality sector — MakeMyTrip, Goibibo and OYO — for affecting their businesses, due to predatory practices, high commissions and non-uniform commissions. To streamline both the investigations, CCI’s probe arm Director General (DG) has now been directed to investigate both the cases and submit a consolidated investigation report.
The complaint in October was fled by hoteliers association Federation of Hotel & Restaurant Associations of India (FHRAI) which had also alleged that the three players hold a collective dominance over the hospitality sector, which affects other hoteliers’ business even further.
CCI’s Scrutiny On Ecommerce
Last month, CCI had also ordered an investigation into the businesses of ecommerce marketplaces, Amazon and Flipkart.
In its order, CCI had observed that the exclusive arrangements between smartphone brands and ecommerce platform and select sellers selling exclusively on either of the platforms, coupled with the allegation of linkages between the preferred sellers and platforms merit an investigation.
However, the Karnataka High Court, on February 14, provided a sigh of relief to the ecommerce company by putting a stay on the CCI investigation. Notably, Amazon had moved to the HC for seeking a stay on this investigation.
