CCI directs MakeMyTrip, Go-Ibibo to list FabHotels, Treebo on their portals

The Competition Commission of India (CCI) has passed an interim order directing MakeMyTrip and Go-Ibibo to allow FabHotels and Treebo to be listed on its online portals..The CCI passed the order after opining that the delisting of FabHotels and Treebo, as well as other budget hotels which were availing some logistic support from them, affected competition in the market by denying access to an important channel of distribution through foreclosure.."It is in the interest of free market and trade that injunctive orders are called for in this matter and the Commission finds it a fit case to exercise its discretion to allow interim relief in the matter, till further orders," CCI stated..The order under Section 33 of the Competition Act, 2002 was passed by Ashok Kumar Gupta, Chairperson; Sangeeta Verma, Member and Bhagwant Singh Bishnoi, Member while disposing of the plea made by FabHotels and Treebo for grant of interim relief. .In October 2019, CCI had prima facie found a case for investigation against MakeMyTrip and Go-Ibibo (MMT-Go) for abuse of dominant position and against MMT-Go and OYO for refusal to deal with competitors. .The Director General was directed to carry out detailed investigation and submit a joint investigation report..Subsequently, CCI prima facie found the commercial arrangement between OYO and MMT-Go whereby MMT-Go agreed not to list the closest competitors of OYO on its platform, to be in contravention of the provisions of the Competition Act. .Fab Hotels and Treebo thus approached the Commission seeking interim relief to get relisted on the online platforms of MMT-Go. .The CCI in the present interim order stated that there was a strong prima facie case of contravention of the Competition Act, which continues to be committed by MMT-Go. "In the facts of the present case, the act being complained of is the termination of listing arrangement which FabHotel and Treebo had with MMT-Go pursuant to the OYO Agreement. The Commission is prima facie satisfied, to a level of satisfaction as envisaged by SAIL judgment and which satisfaction has already been recorded in clear terms supra, that such act/conduct was committed and that it continues to be committed," the order said. .The CCI further stated that the balance of convenience was in favour of FabHotel and Treebo as MMT-Go would not be put to much inconvenience even if they were to provide access to these players on its online portals. . "MMT-Go is a dominant platform, and as alleged a gateway for online hotel booking, which constitutes an important access route for independent hotels to reach the end-consumers. While the non-accessibility may significantly hamper the online visibility of the claimants i.e. FabHotels and Treebo but more importantly of the associated budget hotels that avail of the franchise services of FabHotels and Treebo, providing such access does not seem to cause any significant comparative hardship to MMT-Go as such," it said. .Given the upsurge in online search, booking and shopping, the CCI added that denial of access to dominant online intermediation could be lethal to the functioning of businesses that rely on intermediaries to reach the end-consumer ."As can be gathered from the claims made by FabHotels and Treebo and also the data furnished by them, the delisting already affected their growth adversely, even before the outbreak of pandemic and weakened their position as credible competitors in the relevant market. Covid-19 further exacerbated the situation given the sudden shift in the distribution architecture with digital distribution channels gaining unprecedented relevance during the pandemic, as elucidated by the Commission in earlier paras. With the change in consumer preferences to online booking of hotels, it has become critical, more than ever before, for the budget hotels and those as franchisee service providers to get visibility on OTAs to effectively survive.".The Commission clarified that nothing stated in the order shall tantamount to a final expression of opinion on the merits of the case. .Treebo was represented by advocates Abir Roy and Ishaan Chakrabarti..Fab Hotels was represented by Senior Advocate Sajan Poovayya along with advocates Raksha Agrawal, Karan Chandhiok, Pratibhanu Singh Kharola, Lagna Panda, Ruchi Khanna..MMT and GoIbibo was represented by Senior Advocate Arun Kathpalia and advocates Sreemoyee Deb, Modhulika Bose, Saurabh Taneja, Swati Sharma, Shashank Gautam..[Read Order]