OYO not guilty of abusing dominant position: Competition Commission

OYO not guilty of abusing dominant position: Competition Commission
Photo Credit: Photo Credit: VCCircle
1 Aug, 2019

OYO, the Gurugram-based budget hospitality and accommodation services provider, has not been found to be guilty of abusing its dominant position, the country’s competition watchdog said in a ruling.

Competition Commission of India (CCI) added it could not conclusively infer that OYO was indeed enjoying a dominant position in the accommodation booking space.

The commission’s ruling was based on a complaint lodged by New Delhi-based RKG Hospitalities, which operates Hotel Divine Inn.

The Delhi-based hotel had alleged that OYO indulged in  “one-sided, unfair and discriminatory” practices, which it attributed to its “dominant”  position.

The complaint spoke about a combination of OYO’s periodical announcements of its inventory growth numbers, news reports and research-based sector reports by firms, including Kalagato and Redseer, to show that the company was being unfair. 

OYO and Divine Inn had entered into a marketing and operational consulting agreement in August 2017, the order document showed. 

Divine Inn termed several of OYO’s practices as unfair, including unilateral modification of hotel structure to meet its standards, exclusive signage of co-branding of OYO with its hotel name (eg: OYO Divine Inn) and performance-based incentives and disincentives based on OYO’s policy. 

Additionally, OYO had also allegedly offered a predatory discount of as much as 60% on hotel room bookings and additional cash-backs. This, the complainant alleged, was primarily done to grab higher market share at the cost of excluding others and also to create unviable market conditions. 

In the ruling, the commission said the information provided by Divine Inn was insufficient to prove allegations of unfair trade practices.

The order also said the relevant market for the purpose of this case was franchising services for budget hotels in India and not hotel operators. Additionally, the information furnished by Divine Inn did not shed light on parameters where OYO was alleged to be dominant.

CCI recognised other hotel inventory aggregators like Fab Hotels, Treebo, Vista Rooms, Comfort Inn and Room on Call as OYO’s competitors.  It also said that OYO did appear to be a market leader in the franchising services markets.