CCI clears Oyo of market dominance, predatory pricing allegations

CCI clears Oyo of market dominance, predatory pricing allegations
Photo Credit: Photo Credit: VCCircle
30 Oct, 2019

Gurugram-based budget hospitality and services provider OYO Hotels and Homes is not in a dominant position in the market, says the Competition Commission of India (CCI).

The competition watchdog added that Oravel Stays Private Limited, which operates Oyo, is a hotel chain and not an online travel agency (OTA). 

 This comes after the Federation of Hotel & Restaurant Associations of India (FHRAI), an industry body, had accused the company of market dominance and predatory pricing. 

CCI has dismissed five out of six allegations, which include price parity, predatory pricing, charging of commissions, misrepresentation of information and hotel service fee levies, according to a statement.

The competition regulator has said that Oyo is not charging exorbitant commissions from hotels which are a part of its chain. 

Earlier in August, the commission had said in a ruling that Oyo was not found to be guilty of abusing its position.

The regulator, however, has not cleared the company of all the charges and has ordered an investigation on Oyo and Make My Trip-Goibibo over the contract between the hotel chain and distribution platform for any alleged denial of access to other hotel players.

“We are a fully-compliant organisation and have the utmost faith in our administrative and judicial processes,”  an OYO spokesperson said.

SoftBank-backed Oyo, one of the world’s largest hotel chains, has been valued at about $10 billion. The company is facing a backlash from hotel owners, who are unhappy with its fee structure. 

Last month, CCI had approved Oyo founder Ritesh Agarwal’s $1.5 bn worth stock buyback plan.