The Competition Commission of India (CCI) has imposed monetary as well as behavioral sanctions on three renowned travel and hospitality companies in the country for anti-competitive arrangements amongst each other. Sanctions have been imposed on MakeMyTrip and Goibibo as well as on OYO for its anti-competitive arrangement vide which the former two delisted the competitors of OYO from its online portals in 2018.
CCI carried out an in-depth analysis for the delineation of the relevant market, laying special emphasis on such assessment in the case of platform markets. Commenting on the role of interdependencies in two-sided or multi-sided markets, the CCI opined that it is important to understand the nature of the interaction and interdependencies between the different sides of a multi-sided platform to ascertain the impact of such interaction or interlinkages in the analysis. However, the role of such interdependencies at the time of delineating relevant markets should be limited to understanding the impact of such interactions on the substitutability analyzed primarily from the aggrieved user side.
The CCI nevertheless undertook a substitutability assessment from the perspective of both user groups. From the end user's perspective, the CCI relied upon the ‘Search, Compare and Booking’ (SCB) functionality test and observed that owing to the distinct characteristic features of the OTAs, they may not be comparable with other online modes.
Inter-alia for these reasons, the CCI concluded that, firstly, online and offline are not part of the same market and secondly, even within the online segment, OTAs constitute a separate relevant product market. Accordingly, the relevant market was defined as the “market for online intermediation services for booking of hotels in India”.
As regards dominance, the CCI considered various factors under Section 19(4) having due regard to the dynamic nature of the market under consideration, and found MMT-Go to be holding a dominant position in the market for online intermediation services for booking of hotels in India during the period of inquiry, that is. 2017-2020.
The CCI first examined the parity obligation vide which MMT-Go was imposing wide price parity as well as room availability parity obligations on its hotel partners. However, what perplexed the CCI in the instant matter was the imposition of price parity in conjunction with other impositions for example room parity obligations, deep discounting strategies, and exclusivity conditions, which warranted a simultaneous assessment of the impact and reinforcing nature of such impositions.
Based on an in-depth assessment, the CCI found that the deep discounts and parity conditions, in conjunction, create an ecosystem that reinforces MMT-Go’s dominant position in the relevant market.
Besides the abuse of the dominant position by MMT-Go, the CCI also examined the commercial arrangement between MMT-Go and OYO vide which FabHotels and Treebo were delisted from the former’s online portals in 2018. Based on the material available on record, the CCI found that there was an agreement/understanding between OYO and MMT-Go which was like a vertical arrangement amenable to Section 3(4)(d) read with Section 3(1) of the Act and the same had adversely affected competition in the market by denying access to an important channel of distribution through foreclosure. Further, the CCI also observed that though FabHotels and Treebo were relisted by MMT-Go under the intervention of the CCI in 2021, such relisting needs to be on equitable terms.
Based on the detailed reasoning provided in the order, the CCI found the conduct of MMT-Go in violation of the provisions of Section 4(2)(a)(i) as well as Section 4(2)(c) read with Section 4(1) of the Act. Further, the arrangement between MMT-Go and OYO was also found to be in contravention of Section 3(4)(d) read with Section 3(1) of the Act.
Observing that besides imposing a monetary penalty, the fair market regulator must ensure an environment that supports fair competition, the CCI prescribed certain broad behavioral remedies to MMT-Go. MMT-Go has been inter-alia directed to modify its agreement with hotels/chain hotels to remove/abandon the price and room availability parity obligations concerning other OTAs and also the exclusivity conditions that exist inter-alia in the form of a D-minus clause. Further, MMT-Go has been directed to provide access to its platform on a fair, transparent, and non-discriminatory basis to the hotels/chain hotels, by formulating the platforms’ listing terms and conditions objectively. MMT-Go has also been directed to provide transparent disclosures on its platform as regards the properties not available on its platform, either on account of termination of the contractual arrangement with any hotel/chain hotel or by exhaustion of quota allocated to MMT-Go by such hotel/chain hotel.
Besides, monetary penalties have also been imposed on MMT-Go and OYO at the rate of percent of their relevant turnovers, amounting to Rs 223.48 crore and Rs 168.88 crore respectively.
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