Investigation Launched into MMT-Go and OYO for Alleged Abuse of Power and Anti-Competitive Practices.

The Commission determined a prima facie case for investigation against MMT-Go and OYO for alleged violations of Sections 3(4) and 4 of the Act, focusing on potential abuse of dominant position and anti-competitive practices. It directed the Director General to conduct a detailed investigation and submit a report within 150 days. The investigation will also examine any other parties or entities involved.

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Issues Involved:
1. Allegations of abuse of dominant position by MMT-Go and OYO.
2. Determination of relevant market.
3. Assessment of dominance.
4. Analysis of conduct, including room and price parity impositions, denial of market access, predatory pricing, exorbitant/unfair commissions, misrepresentation of information, and hotel service fee.

Detailed Analysis:

1. Allegations of Abuse of Dominant Position by MMT-Go and OYO:
The Informant alleged that MMT-Go and OYO abused their dominant positions by charging excessive commissions, engaging in predatory pricing, and imposing unfair contractual terms. They also alleged that MMT-Go and OYO cartelized and entered into anti-competitive agreements. The Commission noted that the Act does not envisage collective dominance, thus the allegations of collective abuse were dismissed.

2. Determination of Relevant Market:
The relevant market was delineated to assess the dominance of MMT-Go and OYO. For OYO, the relevant market was identified as the "market for franchising services for budget hotels in India," based on previous findings in Case No. 03 of 2019. For MMT-Go, the relevant market was identified as the "market for online intermediation services for booking of hotels in India," considering the distinct nature of online platforms and their growing importance in the hotel reservation space.

3. Assessment of Dominance:
The Informant provided data suggesting that MMT-Go held a 63% market share in the online OTA segment, indicating dominance. MMT-Go contested this, citing a broader market share of less than 11% in the overall travel market. However, the Commission found MMT-Go to be prima facie dominant in the relevant market for online intermediation services for booking hotels. OYO, despite being a significant player, was not found to hold a dominant position in the franchising services market for budget hotels.

4. Analysis of Conduct:
Room and Price Parity Impositions:
MMT-Go imposed terms preventing hotels from offering lower prices on other platforms or their own websites, and required room parity. Such broad APPAs (Across Platform Parity Agreements) could inflate commissions and prevent new low-cost platforms from entering the market. This needs investigation under Sections 3(4) and 4 of the Act.

Denial of Market Access:
Treebo and Fab Hotels were allegedly removed from MMT-Go's platform for not agreeing to high commissions, and OYO was given preferential treatment. This could contravene Section 3(4) of the Act if it leads to refusal to deal or exclusive arrangements that harm competition.

Predatory Pricing:
MMT-Go and OYO were accused of offering deep discounts below the average room rate, potentially to eliminate competition. This practice, especially by a dominant player like MMT-Go, warrants investigation.

Exorbitant/Unfair Commissions:
The Informant claimed MMT-Go charged commissions ranging from 22-40%, which included additional charges like volume discounting incentives. The Commission noted that determining excessive pricing requires further investigation into market structure and cost conditions.

Misrepresentation of Information:
MMT-Go allegedly showed rooms as unavailable instead of delisting them, creating information asymmetry and denying market access to hotels. This conduct, potentially abusive, needs investigation.

Hotel Service Fee:
MMT allegedly charged a service fee from consumers in the name of hotels, which was not passed on to the hotels and was discriminatory. This conduct also merits investigation.

Conclusion:
The Commission found a prima facie case for investigation against MMT-Go and OYO for alleged violations of Sections 3(4) and 4 of the Act. The Director General (DG) was directed to conduct a detailed investigation and submit a report within 150 days. The investigation would also consider the involvement of any other parties/entities found during the investigation.

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