In a recent development involving Fab Hotels’ inclusion in the on-going investigation of Oyo and Go-MMT (GoIbibo and MakeMyTrip) by the Competition Commission of India (CCI) has further strengthened the Federation of Hotel and Restaurant Associations of India (FHRAI) case against the duo online entities. Last month, Fab Hotels had filed an application to the CCI seeking impleadment stating it has substantial interest in the outcome of proceedings and that it is necessary in public interest to allow it to be a part to the proceedings in the matter. The FHRAI has expressed that Fab Hotels’ involvement will allow presenting its opinion in the matter for a meaningful investigation.
In October 2018, FHRAI had filed a complaint to the CCI regarding Oyo and the online travel agency (OTA) Go-MMT of destroying competitive pricing in the hospitality market by abusing their dominant positions.
“Our position now stands vindicated with Fab Hotels confirming that barriers were imposed by MMT and Oyo as part of their tacit agreement to ultimately deprive public and other hotel players fair and equal access. MMT has abused its dominant position by imposing unfair trade terms and conditions on Fab hotels and Treebo Hotels, subsequently de-listing the two from its online portal. Also the commercial arrangements between MMT and Oyo, which took effect in 2018 has created entry barriers and has foreclosed the market for the competitors of Oyo, like Fab Hotels,” says Mr. Gurbaxish Singh Kohli, Vice President, FHRAI & President, HRAWI.
CCI admitting Fab Hotels’ impleadment on the ground that it has substantial interest in the outcome of the proceedings also comes as a big win for hotel players associated with Oyo, especially in the budget segment. Hoteliers from across the country have alleged Oyo of predatory pricing, exorbitant and unfair commissions, misrepresentation of information and arbitrarily levied service fees.
“We will be shortly submitting more evidence of dominance and misdemeanors on part of MMT and Oyo to the CCI investigation team. We will highlight the illegal actions of these aggregators in the evolving online and digital age, whereby local entrepreneurs and hotels are being destroyed by OTAs who are funded by foreign funds only for their mutual benefit,” says Mr. Pradeep Shetty, Jt. Honorary Secretary, FHRAI & Vice President, HRAWI.
Based on the several complaints received from its members, the FHRAI has produced a substantial amount of evidence to the CCI. The CCI has taken cognizance of its complaint based on the merit of the allegations and with Fab Hotels’ inclusion, the apex body feels confident that justice will be served sooner and in favor of hoteliers.
“The FHRAI will also submit a formal representation to the Government pressing on an urgent need to regulate these new age unicorns to protect local hotel industry from being made subservient to these online giants,” concludes Mr. Nirav Gandhi, Honorary Secretary HRAWI.
