Anti-competitive behavior could cause businesses some serious damage in the country.
The online hotel-booking companies MakeMyTrip Ltd and Goibibo and IPO-bound hotel chain Oyo were fined $47 million for anti-competitive behavior by India’s competition regulator on Wednesday.
Discouragement For Anti-competitive Behavior
It appears that the Competition Commission of India (CCI) has been investigating the companies since 2019.
This has happened following the allegations by a hotel body that MakeMyTrip gave special treatment to SoftBank-backed Oyo on its platform.
While asking to amend their market behavior, CCI has directed MakeMyTrip and Goibibo to finie about $27 million.
Similarly, Oyo was fined $20 million.
Decision Affecting Competition
In response, OYO and MakeMyTrip said that they were reviewing the CCI order, in separate statements issued late on Wednesday.
OYO said, “OYO believes that our business practices and conduct comply with all applicable laws and will take all necessary steps to explain our position in the appropriate forums,”.
Further, a company spokesperson said that MakeMyTrip is a pure-play marketplace with no supply side leaning.
Adding, “We anticipate that the order will have a negative impact on the level of competition and growth of the ecommerce market in India.”
On the other hand, the Federation of Hotel and Restaurant Associations of India (FHRAI) had alleged that agreements between Oyo and Nasdaq-listed MakeMyTrip to give preferential treatment to Oyo on its platform were restricting market access to competitors such as Fab Hotels and Treebo.
In it order, CCI said, “The Commission is of the view that the commercial arrangement between OYO and MMT-Go which led to the delisting of FabHotels, Treebo and the independent hotels, which were availing the services of these franchisors, was anticompetitive,”.
It seems that Oyo and MakeMyTrip were hurting competition by offering deep discounts and charging “exorbitant” fees from hotels, claimed FHRAI.
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