FabHotels made party to CCI investigation into MMT-Go and OYO

FabHotels made party to CCI investigation into MMT-Go and OYO
Photo Credit: Pixabay
20 Feb, 2020

As part of the ongoing investigation into MakeMyTrip-Go (MMT-Go) and OYO by the Competition Commission of India (CCI), the competition watchdog has accepted the impleadment by budget hotel platform FabHotels to make it a party to the ongoing proceedings. 

The Goldman Sachs backed company, owned and operated by Gurugram based Casa2Stays, had said in its impleadment dated January 23, 2020, that MMT-Go had abused its dominant position as the leading online travel aggregator (OTA) by “imposing unfair trade terms and conditions” on FabHotels and subsequently delisting it from the platform. 

Working with partner hotels for standardisation, Fab Hotels is dependent on OTAs for generating business and search. In its appeal to CCI, Fab Hotels further said that the commercial agreement between MMT-Go and OYO, formed in 2018, closed the market for competitors.  

It is noteworthy that OYO was delisted from MMT platform for a period of two years before the agreement was signed. However Fab Hotels and Treebo continue to be delisted from the platform on account of disagreements on commissions charged by MMT. 

The ongoing investigation is based on a complaint filed by the Federation of Hotel and Restaurants Association of India (FHRAI), an industry lobby that represents 2503 hotels and 1173 restaurants. The CCI found prima-facie case for investigation against MMT-Go and OYO and directed the Director General to carry out a detailed investigation into the matter in October 2019. 

“Our position now stands vindicated with FabHotels confirming that barriers were imposed by MMT and OYO as part of their tacit agreement to ultimately deprive public and other hotel players fair and equal access,” said Gurbaxish Singh Kohli, vice president of FHRAI in a statement.

The CCI in January also directed an investigation into the businesses of Amazon India and Flipkart on the basis of a complaint by traders body, Delhi Vyapar Mahasangh. A stay order was issued by the Karnataka High Court on the investigation based on a petition filed by Amazon