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<ul><li>The Competition Commission of India is probing into MMT and <keyword id="2808667" type="PERSON" weightage="20" keywordseo="OYO">OYO</keyword>’s deal for an adverse effect on competition in the market. </li><li>There is a thin line indeed between businesses which want to share benefits and those who want to control the market. </li><li>With the Indian digital penetration, is it time to bring in a new era of competitive businesses in India?</li></ul><keyword id="54613" type="COMPANY" weightage="20" keywordseo="makemytrip">MakeMyTrip</keyword> and Oyo’s commercial agreement has brought a new problem at their doors – the Competition Commission of India. The <keyword id="47183" type="ORGANIZATION" weightage="20" keywordseo="CCI">CCI</keyword> is now probing into their deal for a possible adverse effect on the market. The alleged dominance that they would enjoy is now under scanner. And prima facie, MakeMyTrip is identified as ‘dominant’ in the online travel market while OYO holds the same position in the hotels market. And the joint effect of their partnership could alter the way the market operates. “OYO has been prima facie found to be a significant player in the ‘market for franchising services for budget hotels in India’,” said the report. Both Oyo and MMT had begun their partnership in February 2018. In 2019 they renewed their partnership for five years. In an earlier conversation with Business Insider India, Deep Kalra, founder and chairman of MakeMyTrip, had said, “Oyo for us would be more a partner, because they are now on the supply side and the fastest growing hotel chain in the world. Like all other hotel chains, they also go direct, they aren’t selling other services. We have always seen competition in the market otherwise.” If CCI finds discrepancies, it could turn a precedent for several deals forged recently. Reliance Jio acquired music streaming app Saavn, which strengthened the latter’s position in the Indian market against competition like Gaana, Spotify and even the Airtel-backed Wink. As per an exclusive partnership, OnePlus phones come pre-installed with the Amazon app. There is a thin line indeed between businesses which want to share benefits and those who want to control the market. “There is a clear need of legal audit of all such agreements. Such partnerships should always and periodically be evaluated on the touchstone of AAEC. Unless the CCI establishes AAEC, it can’t bring a case against a party under section 3(4) of the Act,” said KK Sharma, Chairman, KK Sharma Law Offices &amp; ex-Director General and Head of Antitrust and Merger Divisions, CCI. We have a vertical relationship with MMT, says Oyo The Federation of Hotel and Restaurant Associations of India lodged a complaint against MMT and its acquired unit GoIbibo and Oyo Hotels and Homes. The complaint was against MMT-Go and Oyo’s alleged dominance in the market, predatory pricing. It also alleges that their commercial agreement has led to the presumable exclusion of other competitors on MMT’s platform. “Whether the commercial agreement between OYO and MMT entails preferential treatment to OYO and consequent exclusion of Treebo, Fab hotel and any other hotel chain and if so, the effect of the same on competition merits investigation,” the CCI order said. Oyo argued that it is not an online aggregator but a hotel chain which is listed on MMT and has a vertical relationship with the latter. “We will continue to cooperate with Hon’ble CCI’s investigation process as we review the complete order. We will actively engage with the Hon’ble Commission in this process,” said an OYO spokesperson.’ The CCI further said that any restrictive agreement which may lead to refusal to deal with some players or exclusive arrangement with some players, may have potential adverse effect on competition. “The problem is not merely because of there being an exclusive partnership. It is because of conduct much beyond this,” said Sharma. He further explained that the Commission has asked DG to examine violation of Section 3(4) of the Act. It means CCI has to establish that such conduct exists and if it does, if it can have an adverse effect on the competition. “Only after the above are established, can it be said that there is a violation of the provisions of the Act; and further only after the above are done, can the onus of proof move to the person against whom allegations are made,” said Sharma.

MakeMyTrip and Oyo are in trouble with the CCI, opening up a gray area for business partnerships in India

(Eds: Adding details) New Delhi, Feb 24 () The Competition Commission on Monday ordered a detailed probe against MakeMyTrip (MMT) and OYO for allegedly indulging in unfair business practices, on a complaint filed by the operator of Treebo Hotels. This is the second time in less than six months that the fair trade watchdog has called for an investigation against the two entities after finding prima-facie evidence of violation of competition norms. MMT, an online travel agency, has a pact with OYO, which provides franchising services to budget hotels. The complainant -- Rubtub Solutions -- operates Treebo Hotels, a competitor to OYO. Exclusion of Treebo and its partner hotels from listing on MMT platform pursuant to the commercial arrangement between the latter and OYO, price parity restrictions on the platform and exclusivity condition on Treebo are the three main issues raised by the complainant, as per the watchdog. In a 13-page order, the Competition Commission of India (CCI) said that a case against MMT and OYO for entering into a vertical arrangement having an appreciable adverse effect on competition in the market is also "prima facie" made out. "The Commission is of the view that prima facie a case of contravention against MMT for abuse of dominant position... is made out on account of all the three allegations analysed supra," it noted. The watchdog's probe arm -- Director General (DG) -- has been directed to investigate the current matter along with those that were referred in October last year, and submit a consolidated investigation report. In October 2019, CCI ordered a probe against MMT-GoIbibo and OYO. As per the complainant, Treebo and its partner hotels are being excluded from listing on MMT's platform through abrupt termination pursuant to the commercial arrangement between MMT and OYO. It was alleged that MMT imposed "price parity restriction" on Treebo partner hotels through the chain agreement that restricted on them from providing properties on Booking.com and Paytm at a better price. Taking cognisance of the "chain agreement", CCI noted that it entails price parity as well as room parity condition. It provides that neither Treebo can provide a better rate compared to competing online travel agencies nor can they provide rooms to online travel agency unless those rooms are first made available on the platform of MMT. Additionally, MMT allegedly imposed an "exclusivity condition" on Treebo through exclusivity agreement which restricted it from listing its properties on Booking.com and Paytm for 72 hours and 30 days, respectively, prior to check-in for hotels situated in certain cities. The watchdog said that such restriction "prima facie appears unfair, and hence exploitative" for the Treebo partner hotels as it denies them an opportunity to list on other platforms and to gain access to those platforms, especially Booking.com which appears to be the closest competitor of MMT, during the busiest booking periods. According to the complainant, OYO has abused its dominant position in the market of franchising services for budget hotels in India by entering into an anti-competitive vertical arrangement with MMT. SRS RAM RVK

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MakeMyTrip and Oyo are in trouble with the CCI, opening up a gray area for business partnerships in India

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Competition Comm orders detailed probe against MakeMyTrip, OYO

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