TelecomLive April-2020

Unfair biz practices by Oyo, MMT Telecom LIVE April 2020 48 www.telecomlive.com check-in day. Similar restriction was imposed for a much longer period, ie 30 days, in case of hotels situated in Category B cities. Category A included hotels in 29 Indian cities while Category B included hotels situated in 25 Indian cities. The Commission said that the aforesaid restriction prima facie appears unfair, and hence exploit- ative, under Section 4(2)(a)(i) of the Act, for the Treebo partner hotels as it denies them an opportunity to list on other platforms / OTAs and to gain access to those platforms, espe- cially Booking.com which appears to be the closest competitor of MMT, during the busiest booking periods. Such restriction also seems to be exclusionary as two OTAs were excluded from listing the Treebo chain of hotels, thus potentially lead- ing to denial of market access for those OTAs with regard to those hotels branded by Treebo. Thus, apart from prima facie appearing to be in contravention of Section 4(2)(a)(i), the restriction also seems to be prima facie in con- travention of Section 4(2)(c) of the Act. Though this restriction is pres- ently stated not to apply on Treebo partner hotels pursuant to the termi- nation of the Exclusivity Agreement (ie March 2018), this fact may not be relevant to relieve MMT of its liabil- ity, if this clause is otherwise found to have contravened the provisions of this Act, CCI further said. In another probe case which was ordered in October 2019, the CCI is examining hoteliers' complaints against MakeMyTrip, Goibibo and Oyo for affecting their businesses, due to predatory practices, high commissions and non-uniform com- missions. The complaint was filed by Federation of Hotel & Restaurant Associations of India (FHRAI) which had also alleged that the three play- ers hold a collective dominance over the hospitality sector, which affects other hoteliers' business even fur- ther. To streamline both the investiga- tions, CCI's probe armDirector Gen- eral (DG) has now been directed to investigate both the cases and sub- mit a consolidated report. CCI said that the restrictive arrangement between Oyo and MMT, both of whom have consid- erable presence in their respective market segments, may lead to refusal to deals which may have adverse effects on competition. CCI observed that Clause 2.3 of the 'Chain Agreement' entails price parity as well as room parity condition. It provides that neither Treebo can provide a better rate to the competing OTAs (Online Travel Agencies) nor can they provide the rooms to OTAs unless those rooms are first made avail- able on the platform of MMT. This may result in removal of incentive for platforms to compete on the commission they charge to hote- liers, may inflate the commissions and the final prices paid by con- sumers, and may also prevent entry of new lowcost platforms. CCI said such parity restrictions were prima facie held to be anti- competitive and were directed to be investigated under Section 3(4) aswell as Section 4 of the Act. With regard to the third allega- tion i.e. imposition of an exclusiv- ity condition by MMT on Treebo, the Commission observed that Clause 2.1 of the 'Exclusivity Agreement' shows that Treebo was not permitted to list its hotels situ- ated in cities classified under Cate- gory A on MMT's two competitors, ie Booking.com and Paytm, 72 hours (ie 3 days) prior to the T he Competition Com- mi s s i on o f I nd i a (CCI) has ordered a d e t a i l e d p r o b e against MakeMyTrip (MMT) and Oyo for indulging in unfair business practices, on a complaint filed by Rubtub Solu- tions Pvt Ltd, which operates under the brand name Treebo Hotels. While ordering the probe, CCI also noted that a case against MMT and Oyo for entering into a vertical arrangement having an appreciable adverse effect on com- petition (AAEC) in the market is "prima facie"made out. Rubtub is in the business of providing franchisee services to budget hotels. CCI observed that Rubtub is primarily aggrieved on account of three issues: 1. Vert ical arrangement between MMT and Oyo: Treebo and its partner hotels are being excluded from listing on MMT's platform through abrupt termination - pursuant to the commercial arrange- ment betweenMMT andOyo; 2. Price restriction: MMT, as a dominant player, imposed 'price parity restriction' on Treebo partner hotels through the Chain Agreement, which restricted it from providing its properties to Booking.com and Paytm (MMT's competi- tors) at a better rate/price; and 3. Exclusivity agreement: MMT imposed an 'exclusivity condition' on Treebo through 'Exclusivity Agreement' which restricted it from listing its properties on Booking.com and Paytm (MMT's competi- tors) for a period of 72 hours and 30 days prior to check-in for hotels situated in Cate- gory-A and B cities, respec- tively. Unfair biz practices by Oyo, MakeMyTrip CCI orders detailed probe