The Competition Commission of India (CCI) on Wednesday imposed hefty penalties of more than Rs 392 crore on online travel aggregators MakeMyTrip, Goibibo and hospitality firm OYO for indulging in unfair and anti-competitive business practices.

According to a 131-page order passed by the regulator on Wednesday, a penalty of Rs 223.48 crore was imposed on MakeMyTrip and Goibibo merged entities (MMT-Go) and an additional Rs 168.88 crore on OYO. The penalties were slapped on both the companies for indulging in anti-competitive practices by invoking their leadership position in the online hotel booking market.

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In a statement, OYO said it is currently “reviewing” the CCI order in detail and that it would continue to work with all online travel aggregators as distribution partners. “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,” it said.

A spokesperson for MakeMyTrip said that “the order will have a negative impact on the level of competition and growth of the ecommerce market in India”. The firm hinted that the CCI order is appealable but did not specify if it plans to file an appeal. “The CCI’s order is appealable before the National Company Appellate Tribunal within 60 days. We will determine the future course of action as per the advice of our legal counsels,” the spokesperson added.

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MMT-Go is said to have entered into ‘price parity’ deals with its hotel partners wherein it demanded that price parity be maintained with regard to the prices charged by it on MMT and other online aggregators. A price parity agreement meant that the hotel must offer the cheapest or lowest prices to MMT-Go when compared with the others.

Apart from the penalties which amount to around 5% of the average annual turnover of MMT-GO and OYO, the CCI also directed the internet firms to alter their contract to remove all anti-competitive price parity agreements.

The regulator had originally begun investigating MMT-Go and OYO in 2019 following a complaint from the Federation of Hotel and Restaurant Associations of India (FHRAI), and a separate complaint filed by rival hotel aggregators Treebo and Fab Hotels in 2020.

“The Commission is of the view that, besides imposing monetary penalty, it is imperative to ensure an environment that supports fair competition amongst the OTAs as well as amongst the franchisee service providers, which will ultimately benefit consumers and the independent hotels in the long run,” the order said.

The CCI also took note of OYO exclusivity deal with MMT-Go, which is currently considered India’s largest online travel aggregator. After signing the exclusivity deal, MMT-Go then went on to delist its smaller competitor Treebo and Fabhotels, essentially denying both players access to a large share of the market. However, the CCI had earlier ordered MMT-Go to reinstate listings of hotel rooms belonging to Treebo and FabHotels on its platform in March 2021 after the two hotel aggregator start-ups approached CCI with a complaint in February 2020.

With the penalties now applied to both OYO and MMT-Go, the CCI has put an end to the scuffle and has deemed OYO’s arrangement with the aggregator illegal. “The Commission directs MMT-Go and OYO to deposit the respective penalty amounts as calculated above within a period of 60 days of receipt of the present order, in accordance with the provisions of the Act,” the order added.