Just few days after rejecting all the allegations of unfair business practices against ecommerce players including Flipkart, Snapdeal, Amazon, Jabong and Myntra, now, the Competition Commission of India has ordered a probe against cab hailing app Ola for alleged predatory pricing. The organisation has ordered a detailed investigation against the company after it found that Ola was violating competition norms.
This move comes after a complaint was filed by Chennai-based Fast Track Call Cab against ANI Technologies, the parent company of Ola, alleging contravention of provisions of section 3 and 4 of the relevant Act.
Accordingly, the commission, as per provisions of section 26(1) of the Act, has now directed the Director-General to investigate the matter and complete it within 2 months.
During this investigation, the Director-General will be investigating the conduct of officials of Ola for fixing liability with respect to contravention of the Act, in case Ola is found to have violated the provisions.
“It is observed from the material placed on record that the opposite party is spending more money on discounts and incentives (apart from the variable costs it may be incurring) on customers and drivers compared to the revenue it is earning,” the regulator said.
Additionally, it was also observed the cab hailing company was also spending more per trip compared to the average revenue gain. “While the propriety of these figures is a subject matter of investigation, prima facie, the Commission is of the view that they indicate predatory pricing aimed to oust other players from the relevant market,” the order said.