CCI asks MakeMyTrip to relist FabHotels, Treebo nearly 3 years after their delisting post tie-up with OYO

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Updated: Mar 10, 2021 6:39 PM

According to the CCI order, MakeMyTrip had delisted FabHotels and Treebo from its portals in June and April 2018 respectively after its agreement with OYO. The agreement allegedly conditioned the delisting of properties of the two small hotel chains as they were competitors of OYO.

Treebo and FabHotels had joined the CCI probe against MakeMyTrip and OYO in February last year.

In an interim relief to OYO’s smaller rivals FabHotels and Treebo, the Competition Commission of India (CCI) has asked the online travel company MakeMyTrip to relist properties operated by the two budget hotel chains on its online portals makemytrip.com and goibibo.com with immediate effect. The order, issued on Tuesday, was part of an ongoing probe by the competition watchdog against MakeMyTrip and OYO for “entering into a vertical arrangement having an AAEC (Appreciable Adverse Effect on Competition) in the market,” according to CCI’s earlier order dated February 24, 2020, having an impact on companies like FabHotels and Treebo.

“The commission is thus, convinced that the conduct of MMY-GO (MakeMyTrip and Goibibo) in delisting and continuing to delist franchisee service providers, specifically FabHotels and Treebo, as well as the budget hotels that were availing some logistic support from them, has affected competition in the market…the Commission finds it a fit case to exercise its discretion to allow interim relief in the matter, till further orders,” the latest order noted, a copy of which was seen by Financial Express Online.

According to a press release by MakeMyTrip on February 26, 2018, the company had announced a partnership with OYO to list the latter’s properties on makemytrip.com and goibibo.com. However, according to the CCI order on Tuesday, MakeMyTrip had delisted FabHotels and Treebo from its portals in June and April 2018 respectively after its agreement with OYO. The agreement allegedly conditioned the delisting of properties of the two small hotel chains as they were competitors of OYO. “MMT-GO also submitted that among the conditions put forth by OYO for the relisting and closer commercial arrangement with MMT-GO was that it will delist FabHotels and Treebo.” The two companies had joined the CCI probe in February last year.

“OYO is neither aware nor has received any such order and therefore we have no comments to offer,” an OYO spokesperson said. MakeMyTrip, Treebo, and FabHotels didn’t reply to emails seeking comments for this story.

Also read: OYO vs ZO Rooms: Zostel says it won 3-year legal battle over alleged agreement breach; OYO refutes

MakeMyTrip had argued that there has been no discrimination caused to Treebo and FabHotels by delisting them as they were “neither comparable nor similarly placed with OYO, given the vast difference in their inventory base in comparison to that of OYO,” according to the order. However, CCI in its rebuttal said the fact that OYO asked MakeMyTrip to delist the two companies negated the argument by MakeMyTrip. This implied that FabHotels and Treebo were indeed competing with OYO.

MakeMyTrip had reported a 181.5 per cent quarter-on-quarter growth in gross bookings to $598.8 million in Q3 FY21 versus $213.0 million in Q2 FY21. While air ticketing revenue for the company improved to $18.2 million from $10.9 million during the said period, hotels and packages revenue jumped to $24.4 million from $4.4 million. Bus ticketing revenue had also increased to $10.1 million from $2.7 million.

“MMT-Go’s claim that the hospitality sector is on the path of recovery from the Covid-19 shock makes it even more imperative for a competition regulator to ensure that level playing field in the downstream market is guaranteed through the accessibility of indispensable channels of distribution,” CCI added.

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