CCI Directs Investigation against MakeMyTrip India Pvt. Ltd. and Oravel Stays Pvt. Ltd.

On February 24, 2020, CCI directed an investigation against MMT and Oravel Stays Pvt. Ltd. (‘OYO’) pursuant to a complaint by Rubtub Solutions Pvt. Ltd. (‘Rubtub’) alleging anti-competitive agreements and abuse of dominant position[1].

Rubtub alleged that in 2017, MMT threatened and subsequently removed Rubtub from its platform because Rubtub did not accept MMT’s investment offer. In support of its allegations, Rubtub submitted certain emails which allegedly showed the pressure imposed by MMT on it to accept MMT’s investment offer. Subsequently, at Rubtub’s request, MMT decided to list it back on its platform subject to the latter entering into an ‘exclusivity agreement’ and ‘chain agreement’, which Rubtub had to accept due to suffering losses on account of its removal from MMT’s platform. In this regard, Rubtub submitted two clauses in its agreements with MMT: (i) a clause demanding that Rubtub maintains price parity with regard to the prices charged by it on MMT and other online travel agents; and (ii) an exclusivity restriction restraining Rubtub from listing its ‘Category A’ hotels on the platform of competitors of MMT such as Booking.com and PayTM.

Rubtub further alleged that these agreements were unilaterally terminated by MMT due to its agreement with OYO wherein MMT allegedly agreed to remove OYO’s competitors such as Rubtub from its platform. In this regard, Rubtub submitted transcripts and electronic records of certain conversations among its personnel with the personnel of MMT which showed that MMT refused to list the hoteliers associated with Rubtub under the ‘Hotel Superhero’ scheme pursuant to its arrangement with OYO. Rubtub argued that the relevant market was the ‘market for online intermediation services for booking of hotels in India’ and that OYO was dominant in this market – having a market share of 89%. Rubtub also relied upon a news report to show that MMT renewed its agreement with OYO for a further period of five years. Based on the above, Rubtub alleged (i) denial of market access to it by MMT and OYO from customers who prefer to make their hotel bookings on MMT; (ii) imposition of arbitrary exclusivity condition and price parity condition on it by MMT; (iii) exclusivity supply agreement between MMT and OYO; and (iv) ‘refusal to deal’ imposed by OYO through its arrangement with MMT.

CCI observed that the relevant markets in which MMT and OYO operate and their dominance/market power in those relevant markets has already been assessed by CCI in Case No. 14 of 2009 i.e., ‘market for online intermediation services for booking of hotels in India’ and ‘market for franchising services for budget hotels in India’ respectively. CCI further observed that the allegations pertaining to denial of market access, imposition of price parity condition and ‘refusal to deal’ were already covered by CCI’s prima facie findings in Case No. 14 of 2009. With respect to the allegation on the exclusivity condition imposed by MMT restricting Rubtub from listing its ‘Category A’ hotels on the platform of Booking.com and PayTM, CCI observed that the clause prima facie appears to be unfair and exclusionary in nature and denies MMT’s competitors access to Rubtub’s hotels. Based on the above, CCI directed DG to conduct an investigation against the alleged abuse of dominance by MMT and anti-competitive agreements between MMT and OYO. Further, CCI decided to club the case with Case No. 14 of 2009 since the issues pertaining to both the cases were identical.

[1] Case No. 1 of 2020 (order delivered on February 24, 2020).

Published In:Inter Alia Special Edition - Competition Law - May 2020 [ English
Date: May 11, 2020