Unfair Trade practices: Competition commission of India launched investigation against Oyo Hotels and MakeMy Trip.

The competition commission of India launched the investigation against Oyo Hotels and Homes and MakeMy Trip (MMT) on charges of predatory pricing (The prices of goods and services at such a low level that other firms cannot compete and are forced to leave the market), creating domination and a deep discount. Order of Competition Commission of India says that there is enough material to initiate an investigation, on evidence that these two companies are charging excessive commissions from hotel partners and demanding deep discounts which may result in the destruction of competition in the market price. The complaint actually came from the Federation of Hotel and Restaurant Associations of India. And, competition commission of India has directed its director-general, investigations, to do a detailed investigation in the matter and give a report within 150 days. this case was based upon the activities of Oyo and MakeMy Trip which were being monitored for the last few days of investigation for illegal violation of the provisions of Section 3(4) Act. Further, a prima facie case for investigation under section 4 is made out against MakeMy Trip, as explained in the earlier parts of this order. On behalf of these sections, Director General of  Competition Commission of India directed to carry out a detailed investigation against Oyo Hotels and MakeMy Trip (MMT).

While taking MakeMy Trip into consideration, Federation of Hotel and Restaurant Associations of India assumed that the commissions charged by the company at times were 22-40% (from standalone hotels), which was grossly disproportionate to the commission being imposed by other like Booking.com and Yatra.com. Federation of Hotel and Restaurant Associations of India also assumed that the company artificially created a demand-supply gap by resorting to strategy like fake bookings, besides offering hotel rooms at less than average room rates. Hotel partners once registered with the companies have no option to exit the relationship, Federation of Hotel and Restaurant Associations of India assumed and with regards to Oyo, the association said the company resorted to predatory pricing wherein budget hotels in micro and small markets were targeted.

Regards
~ Aman Shukla