CCI Directs Make My Trip And Go Ibibo To Allow FabHotels, Treebo To Be Listed On Its Online Portals

In an interim order passed on Tuesday, the Competition Commission of India directed Make My Trip and Go Ibibo to allow FabHotels and Treebo to be listed on its online portals, after observing that such delisting affects competition in the market by denying access to important channel of distribution.

"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. The Commission notes that FabHotels and Treebo have primarily prayed for a relisting on the MMT-Go portals for attaining visibility. Accordingly, MMT-Go is directed to allow FabHotels and Treebo to be listed on its online portals" CCI ordered.

CCI bench comprising of Chairperson Ashok Kumar Gupta, Sangeeta Verma and Bhagwant Singh Bishnoi passed the interim order.

Background

The order came after an application under sec. 33 of the Competition Act, 2002 was moved by FabHotels and Treebo directing Make My Trip and Go Ibibo platforms to re list their properties on all their portals.

FabHotels and Treebo had alleged that Make My Trip and OYO entered into a confidential commercial agreement wherein Make My Trip agreed to give preferential treatment to OYO on its platform leading to "denial of market access to them" thereby contravening sec. 3(4) and 4 of the Act.

CCI while observing that OYO and Make My Trip operated in separate relevant markets, ordered investigation vide order dated 28.10.2019 and prima facie found that the commercial arrangement between the two was in contravention to the Competition Act, 2002.

It was after the said allegations that FabHotels and Treebo approached the CCI seeking interim relief in order to get listed on the online platforms of Make My Trip and Go Ibibo.

Observation of CCI

The CCI while referring to the judgment of Competition Commission of India vs. Steel Authority of India Ltd., (2010) 10 SCC 744 (SAIL Judgment) was prima facie satisfied that an act in contravention of the provisions of the Act was committed and that it continues to be committed.

"Specifically, 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 Commission observed.

Coming to the element of balance of convenience, the Commission was of the view that the contentions of FabHotels and Treebo showed that the balance of convenience lies in their favor.

"The Commission, at the outset observes that 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." The Commission held.

The bench observed thus:

"The Commission observes that denial of market access need not be complete and absolute in nature, denial of market access in any manner that takes away the freedom of a substitute to compete effectively and on the merits in the relevant market can amount to denial of market access under the provisions of the Act."

Noting that the delisting of FabHotels and Treebo from the portals affected their growth adversely, the Commission opined that the covid 19 pandemic further exacerbated the situation given the sudden shift in the distribution architecture with digital distribution channels gaining unprecedented relevance during the pandemic.

"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. Thus, lack of access to the largest and dominant OTA is likely to cause severe competitive injury particularly in the wake of the pandemic." CCI observed.

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