CCI Penalty: Delhi HC Dismisses MakeMyTrip’s Petition Against NCLAT Order

The Delhi High Court has dismissed a writ petition filed by online travel agency MakeMyTrip against the National Company Law Appellate Tribunal’s (NCLAT) order asking it to deposit 10% of the penalty imposed on it by the Competition Commission of India (CCI).

In its plea, MakeMyTrip said that the NCLAT had passed the order without any jurisdiction. 

In October, the CCI imposed fines on MakeMyTrip-Goibibo (MMT-Go) and OYO Rooms for indulging in anti-competitive practices. While MakeMyTrip was fined INR 223.5 Cr, OYO was fined INR 168 Cr.

Following this, MakeMyTrip and OYO moved the NCLAT challenging the CCI penalty. However, the tribunal admitted the appeals on the condition that they would deposit 10% of the fine imposed by the competition watchdog. 

The MakeMyTrip – Goibibo – OYO Case

The penalty was part of a nearly three-year-long detailed investigation launched by the CCI in 2019.

The scrutiny by the competition watchdog on MakeMyTrip as well as OYO came on the back of accusations of unfair business practices. At the centre of the drama was the contention that the consolidated entity of MMT-Goibibo imposed price parity on hotel partners which barred them from offering their rooms at lower prices on their own websites or other platforms.

The CCI order also said that MakeMyTrip accorded preferential treatment to OYO on its platform, causing a denial of market access to other players. Citing the ‘anti-competitive arrangement’, the competition watchdog stated that MakeMyTrip had delisted OYO’s two competitors – Treebo and FabHotels – from its two online portals in 2018. 

Besides the fine, the CCI also directed MakeMyTrip and Goibibo to change their market behaviour and modify agreements with hotels.

Following the CCI’s order, the Federation of Hotel & Restaurant Associations of India (FHRAI) wrote to the Securities and Exchange Board of India (SEBI) to halt OYO’s initial public offering (IPO).

MakeMyTrip reported a 15% decline in its net loss year-on-year (YoY) to $6.8 Mn in Q2FY23 as against a loss of $8 Mn in the corresponding quarter last year as the global travel industry continues to recover from the impact of the Covid-19 pandemic. At the same time, its total revenue jumped over 94% YoY to $131.2 Mn in Q2 FY23 from $67.5 Mn in Q2FY22.

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