October 30, 2019
CCI Investigation: OYO cleared of all allegations on market dominance and predatory pricing; Dismisses 5 of 6 allegations against OYO by FHRAI
Hon’ble CCI recognises OYO is a hotel chain and not an OTA (Online Travel Agent);
Dismisses FHRAI concerns/allegations against OYO on price parity, predatory pricing, charging of commissions, misrepresentation of information & hotel service fee levies
CCI orders investigation of OYO and Make My Trip-Goibibo on the contract between the hotel chain and distribution platform for any alleged denial of access to other hotel players; OYO extends full cooperation
The Hon’ble Competition Commission of India (CCI) has acknowledged that OYO Hotels and Homes is a hotel chain and not an Online Travel Agency (OTA) while noting that the company is not in a dominant position. With respect to the dismissed allegations, the order from the hon’ble CCI further states that the hospitality company is not engaged in any predatory pricing, and is neither charging exorbitant commissions from hotels which are a part of its chain.
The honorable Commission also refers to its observations and findings in Case No. 03 of 2019 [RKG Hospitality Pvt. Ltd. V. Oravel Travels Pvt. Ltd. (OYO)], given vide order dated 31.07.2019, wherein the position of OYO in the ‘market for franchising services for budget hotels in India’ was assessed in detail. Here too, the honorable CCI order confirmed that OYO is not a dominant player. The order by honorable CCI recommended that OYO is a significant player in the market for franchise service for budget hotels in India.
The CCI has acknowledged that OYO and Make My Trip – GoIbibo (MMT-Go) operate in different segments and that OYO as a budget hotel chain is in a vertical relationship with MMT, which is essentially a distribution platform for hotels. The CCI has directed to investigate the complaint filed by FHRAI against MMT, Go-Ibibo and OYO as it pertains to alleged violation of the provisions of Section 3(4) of the Act only. The concern expressed is around whether OYO’s contractual relationship with MMT, as part of an arrangement, may have an adverse effect on competition. OYO stands ready to extend full support to the investigation and as a law-abiding corporate citizen, has full faith in the administrative and the judicial process.
Commenting on the development, an OYO spokesperson said, "OYO Hotels and Homes started in 2013 with the core mission of creating quality and chic hospitality experience for millions of guests across the world. We are a fully-compliant organization and have utmost faith in our administrative and judicial processes. We will continue to cooperate with Hon’ble CCI’s investigation process as we review the complete order. We will actively engage with the Hon’ble Commission in this process. We are also thankful for the Hon’ble CCI’s recognition of the fact that OYO is a hotel chain and for dismissing certain prima facie allegations regarding price parity, predatory pricing, exorbitant commissions, etc. Given that the matter is sub-judice, we have nothing more to share at the moment.’’