Federation of Hotel & Restaurant Associations of India v. Make My Trip India (P) LTD., 2022 SCC OnLine CCI 58

SCC Online Web Edition, © 2024 EBC Publishing Pvt. Ltd.
Page 1 Monday, February 26, 2024

Printed For: Ajinkya Kurdukar
SCC Online Web Edition: http://www.scconline.com
© 2024 EBC Publishing Pvt. Ltd., Lucknow.
-----------------------------------------------------------------------------------------------------------------------------------------------------------
2022 SCC OnLine CCI 58
In the Competition Commission of India

(BEFORE ASHOK KUMAR GUPTA, CHAIRPERSON AND SANGEETA VERMA AND BHAGWANT SINGH BISHNOI,
MEMBERS)
Case No. 14 of 2019

Federation of Hotel & Restaurant Associations of India and Another …
Informants;
Versus
Make My Trip India Pvt. Ltd. and Others … Opposite Parties.
With
Case No. 01 of 2020
Ruptub Solutions Pvt. Ltd. … Informant;
Versus
Make My Trip India Pvt. Ltd. and Another … Opposite Parties.
Case No. 14 of 2019 and Case No. 01 of 2020
Decided on October 19, 2022
Advocates who appeared in this case:
Ms. Rukhmini Bobde, Advocate;
Mr. Ishan Nagar, Advocate for Federation of Hotel & Restaurant Association of India (FHRAI);
Mr. Abir Roy, Advocate;
Mr. Vivek Pandey, Advocate for Ruptub Solutions Pvt. Ltd.;
Mr. Karan Singh Chandhiok, Advocate;
Mr. Tushar Chawla, Advocate;
Ms. Lagna Panda, Advocate;
Mr. Vishnu Suresh, Advocate;
Mr. Vaibhav Aggarwal, FabHotels for Casa2 Stays Pvt. Ltd. (FabHotels);
Mr. Ramji Srinivasan, Senior Advocate;
Ms. Megha Dugar, Advocate;
Mr. Shashank Gautam, External Counsel;
Ms. Sreemoyee Deb, Advocate;
Mr. Rajat Moudgil, Advocate;
Mr. Anand Sree, Advocate;
Mr. Hitesh Mehra, General Counsel (MMT-Go);
Mr. Justin Coombs, Economist;
Dr. Kadambari Prasad, Economist;
Mr. Avinash Mehrotra, Director, Economist for MakeMyTrip India Pvt. Ltd. and GoIbibo (MMT-
Go);
Mr. Rajshekhar Rao, Senior Advocate;
Mr. Harman S. Sandhu, Advocate;
Mr. Rohan Arora, Advocate;
Mr. Ravi Gangal, Advocate;
Mr. Rakesh Prusti, General Counsel (OYO);
Ms. Urvashi Pathak, Assistant General Counsel (OYO) for Oravel Stays Pvt. Ltd. (OYO).
ORDER UNDER SECTION 27 OF THE COMPETITION ACT, 2002
Information
1. Case No. 14 of 2019 was filed under Section 19(1)(a) of the Competition Act, 2002
(hereinafter, the ‘Act’) by the Federation of Hotel & Restaurant Associations of India (hereinafter,
‘FHRAI’) against MakeMyTrip, Goibibo (hereinafter, collectively referred to as ‘MMT-Go’) and
Oravel Stays Private Limited (hereinafter, OYO), alleging contravention of the provisions of
-----------------------------------------------------------------------------------------------------------------------------------------------------------
Sections 3 and 4 of the Act. The Commission passed an order dated 28.10.2019 under Section 26
(1) of the Act, directing the Director General (DG) to cause an investigation into the matter,
against MMT-Go under Section 4 of the Act for alleged abuse of its dominant position and against
OYO and MMT-Go under Section 3(4) of the Act for their alleged commercial arrangement to de-
list competitors of OYO (namely, FabHotels and Treebo) from MMT-Go online portals.
2. Subsequently, Casa2 Stays Pvt. Ltd. (FabHotels) filed an application dated 23.01.2020,
under Regulation 25 of the Competition Commission of India (General) Regulations, 2009
(hereinafter ‘CCI General Regulations’), seeking its impleadment as a party in Case No. 14 of
2019. The Commission, on being satisfied that FabHotels has substantial interest in the outcome
of proceedings and that it is necessary to allow it to present its opinion in the matter, decided to
permit FabHotels to take part in further proceedings as an Informant, vide order dated
05.02.2020.
3. Thereafter, another Information, namely, Case No. 01 of 2020, was filed by Ruptub
Solutions Pvt. Ltd. (Treebo) under Section 19(1)(a) of the Act, against MMT and OYO raising
similar allegations under Sections 3 and 4 of the Act. The Commission, vide its order dated
24.02.2020, decided to club it with Case No. 14 of 2019 in terms of proviso to Section 26(1) of
the Act, read with Regulation 27(1) of the CCI General Regulations and directed the DG to
submit a consolidated investigation report.
Parties to the Matter
4. FHRAI is a representative body of the hospitality industry in India registered as a non-profit
company under the provisions of Section 8 of the Companies Act. FabHotels, a company
incorporated in 2014, is engaged in the business of providing franchising services to budget
hotels in India under the brand name of FabHotels. Treebo, another company incorporated in May
2015, is also engaged in the business of providing franchising services to budget hotels in India
under the brand name of Treebo Hotels.
5. MMT (OP-1) is an Online Travel Agency (‘OTA’) engaged in the business of providing travel
and tourism related services in India. It is a part of MakeMyTrip group of companies (MMT Group)
under a public holding company MakeMyTrip Ltd. (MMTL), registered in Mauritius. The services
offered by MMT include air ticketing, booking of hotels and holiday packages, bus ticketing, rail
ticketing and car hire. MMT also provides certain ancillary services such as facilitating access to
third party insurance and visa processing. Goibibo (OP-2) is also an OTA engaged in the business
of providing travel and tourism related services in India. The Ibibo Group was founded in 2007
and provides online travel services in India through its consumer travel brands. On 31.01.2017,
MMTL acquired 100% equity interest in Ibibo Group Holding. Thus, they are part of the same
group since then. However, MMT continues to operate its hotels and packages business through
MMT India under the brand name MakeMyTrip, and Ibibo India under the brand name Goibibo.
6. OYO (OP-3) was incorporated in 2012, as an unlisted private company. It facilitates and
markets budget accommodation/hotels by co-branding with them, on its own platform and the
platforms of other OTAs such as MMT-Go, under the brand name ‘OYO Rooms’.
Allegations, as stated in the Information
7. It was alleged that MMT-Go has imposed price parity in its agreement/contract with hotel
partners whereby the hotel partners are not allowed to sell their rooms at any other OTA or on its
own online portal at a price below which it is being offered on MMT-Go's platform. However, MMT-
Go in its own discretion can fluctuate the prices of such hotel rooms. Further, the hotel partners
are mandated to observe room parity whereby they cannot refuse to provide rooms on MMT-Go
platform at any given point of time if the rooms are being provided on any other OTA.
8. It was further alleged that MMT-Go has been indulging in predatory pricing by offering the
hotel rooms at less than the “average room rate”, which is the industry practice for calculating
unit basis cost of rooms. Further, MMT-Go has been offering deep discounts to the customers
which has further led to expansion of their network and retention of customers. Due to such
conduct, the smaller players in the OTA market are being forced to exit. It has also been alleged
that MMT-Go is competing on discounts, rather than prices, and thus, their market performance is
not based on efficiency, but on deep-pockets.
9. Further, it has been alleged that chain hotels/hotel aggregators, namely Treebo and
FabHotels have been denied market access because of their removal from the platform of MMT-Go
as they did not agree to pay the exorbitant commission brokerage charged by the latter. Further,
it was alleged that MMT-Go and OYO have entered into confidential commercial agreements
wherein MMT-Go has agreed to give preferential treatment to OYO on its platform, leading to a
-----------------------------------------------------------------------------------------------------------------------------------------------------------
denial of market access to Treebo and FabHotels.

10. MMT-Go was also alleged to be charging excessive commissions from hotel partners, which
turns out to be around 22% - 40% (from standalone hotels), which is stated to be grossly
disproportionate to the commission charged by other OTAs.
11. Besides the aforesaid, there were some other miscellaneous allegations against MMT-Go
e.g., MMT-Go charges a service fee from the customers at the time of booking the rooms in the
name of the hotels, which is pocketed by it and never passed on to hotels; and the hotel
partners, who are once registered with the MMT-Go, have no option to exit the relationship. Even
when a hotel makes a request to be removed from their platform/portal, the hotel, instead of
being removed from the platform, is shown as “no rooms available” or “sold out”, which severely
affects the business of the hotels.
Directions for DG's Investigation
12. Based on the material available on record, the Commission, prima facie, delineated the
relevant market with regard to OYO as the ‘market for franchising services for budget hotels in
India’ and found OYO to be holding a significant position in the said market, though not
dominant. MMT-GO, on the other hand, was found to be dominant in the ‘market for online
intermediation services for booking of hotels in India’.
13. As regards the room and price parity imposition, the Commission observed that broadly
defined Across Price Parity Arrangements (APPAs), where an OTA restricts a supplier from
charging lower prices or providing better terms on their website, as well as through any other
sales channel, including other OTAs, may result in removal of the incentive for platforms to
compete on the commission they charge to hoteliers, may inflate the commissions and the final
prices paid by consumers and may also prevent entry from new low cost platforms into the
market. Though the magnitude of the anticompetitive effects of such agreements, inter alia,
depend on the market power of the platform, the Commission observed that ‘given the prima
facie dominance of MMT-Go, such parity restriction needs to be investigated to gauge its impact
under Section 3(4) as well as Section 4 of the Act’.
14. As regards the allegation regarding denial of market access, the Commission observed
that because of the commercial agreement between OYO and MMT, MMT gave preferential
treatment to OYO on its portal, whereby the hotels of OYO are given preference and those of
FabHotels and Treebo (its closest competitors) were being delisted. The Commission opined that
such an agreement between OYO and MMT to not list the closest competitors of OYO on its
platform may foreclose an important channel of distribution and potentially contravene the
provisions of Section 3(4) of the Act, given that MMT-Go was prima facie found to be a dominant
player and OYO to be a significant player in their respective spheres.
15. The Commission, apart from the above findings, also ordered investigation in respect of
some other allegations which include predatory pricing, misrepresentation due to delayed
delisting despite termination of listing arrangement and manipulation of market dynamics and
discriminatory charging of service fee by MMT-Go, respectively. The Commission having formed
prima facie view ordered an investigation against MMT-Go for contravention of Section 4 as well
as Section 3(4) of the Act. As regards OYO, investigation under Section 3(4) of the Act was
ordered.
Interim Relief
16. While the matter was under investigation, FabHotels and Treebo filed separate applications
dated 04.11.2020 and 23.11.2020, respectively, before the Commission seeking grant of interim
relief under Section 33 of the Act. FabHotels and Treebo primarily prayed for an order from the
Commission directing MMT-Go to relist their properties on all of MMT-Go portals.
17. The Commission, after hearing FabHotels, Treebo and MMT-Go, was satisfied that the
conduct of MMT-Go in delisting and continuing to delist franchisee service providers, specifically
FabHotels and Treebo as well as the budget hotels, which were availing some logistic support
from them, has affected competition in the market by denying access to an important channel of
distribution through foreclosure. Thus, under Section 33 of the Act, the Commission allowed
interim relief vide its order dated 09.03.2021, whereby MMT-Go was directed to allow FabHotels
and Treebo to be listed on its online portal.
18. Aggrieved by the aforesaid interim order, OYO filed a Special Civil Application (bearing No.
5085 of 2021) before the Hon'ble High Court of Gujarat under Article 226 of the Constitution of
India, primarily alleging that the impugned order, without providing an opportunity of hearing to
-----------------------------------------------------------------------------------------------------------------------------------------------------------
OYO, has interfered with the commercial contractual arrangement between OYO and MMT-Go by
way of a mandatory injunction in the nature of a final order. On 14.06.2021, the Division Bench
of the Hon'ble High Court of Gujarat set aside the Commission's order and remanded the matter
back to CCI for fresh adjudication.
19. Pursuant to High Court's direction, the Commission called the parties for a hearing.
However, on the date of such hearing, i.e., on 13.07.2021, OYO submitted that without prejudice
to any of its rights in the final proceedings, it has no objection with the relisting of FabHotels and
Treebo on MMT-Go's portals. MMT-Go also consented to relist FabHotels and Treebo within a
period of 3-4 weeks from the date of said hearing, in order to complete the formalities related to
relisting. In view of the said submissions, the Commission, with the consent of the parties,
decided to dispose of the interim relief applications filed by FabHotels and Treebo.
Observations and Findings of the DG
20. Pursuant to the directions given by the Commission vide orders passed under Section 26
(1) of the Act, the DG carried out a detailed investigation and submitted confidential version of
the joint Investigation Report on 02.07.2021. After dealing with confidentiality requests, non-
confidential version was filed by the DG on 24.09.2021. The brief observations and findings of the
DG are elucidated in the following paras.
21. The DG noted that the Commission had prima facie delineated the relevant market for
MMT-Go to be ‘market for online intermediation services for booking of hotels in India’. With
regard to the relevant product market, the DG analysed that OTAs offer increased visibility and
discoverability of hotels. OTAs enable the customers a rapid, targeted search for the desired
services independently. Further, OTAs offer one stop solution, i.e., “search, compare and booking”
bundle of services to the customers without any monetary consideration. Also, the price of
booking of a hotel on OTAs is significantly lower as compared to offline mode of booking because
of significant additional discounts offered by OTAs by incurring very high consumer inducement
costs such as cash back incentives, upfront cash incentives, loyalty program, etc. To examine the
substitutability of online hotel booking channels with offline channels, the DG collected responses
from 16 hotels and 5 hotel chains, out of which 76% were found to be not considering online
hotel booking channels as substitute of offline channels. Further, as per the DG report, offline
travel agents such as MSS, GDS, corporate booking, IRCTC, MICE and meta/search platforms
such as Google, Tiktok, Facebook and Instagram do not form part of the OTA market. The DG also
analysed the agreement between MMT-Go and
Treebo . Further,
the DG considered the geographic area of India as the relevant geographic market in this matter.
Based on the above, as regards MMT-Go, the DG defined the relevant market as ‘market for
online intermediation services for booking of hotels in India’.
22. As regards OYO, the DG examined the features of a “Franchise”, as identified in the Black's
law dictionary as well as by the European Commission, and observed that franchising agreement
involves licensing of trademark. The DG reported that OYO enters into a Marketing and Consulting
Agreement (MCA) with its hotel partners, which sets out the terms on which OYO and its hotel
partners will operate such as hotels of OYO network have OYO branded toiletries, OYO carried out
periodical training of the employees of its hotel partners and provide them with technology
support, etc. Based on above, with regard to OYO, the DG defined the relevant market as ‘Market
for franchising services for budget hotels in India’.
23. The DG thereafter assessed the position of dominance MMT-Go in the ‘market for online
intermediation services for booking of hotels in India’, based on the various factors listed under
Section 19(4) of the Act. Based on the submission of Treebo, FabHotels, MMT-Go and other hotel
chains, the DG observed that the OTAs offer distinct bundle of services, which other platforms do
not provide. Consumers prefer to multi-home for two reasons, for better prices and better rooms.
The price parity and room parity practised by all OTAs reduces the incentive to multi-home.
Further, the discounts provided by MMT-Go attracts consumers. Huge customer base in terms of
number of properties listed as well as number of bookings made through MMT-Go website and
discounts offered by MMT-Go reduces the customer's incentive to multi-home.
24. Further, the DG examined the market shares of all the players in the relevant market
based on total room nights booked through their portals, as per the information provided by
OTAs. It was observed that MMT-Go's market share has increased from in the year
2015-2016 to in the year 2017-2018 and further to in the year 2018-
2019. In the year 2019-2020, its market share has declined slightly to .
-----------------------------------------------------------------------------------------------------------------------------------------------------------
Bookings.com which imposed competitive constraints on MMT-Go in the initial years became
marginalised after 2016-2017. Total market shares of other competitors viz. Expedia, Yatra and
Cleartrip is below during the period under scrutiny, Further, market shares of new
entrants viz. Easemytrip and Paytm is below during the period under scrutiny.
Considering the market share, the DG reported that MMT-Go is the dominant player in the
relevant market and other competitors such as Yatra, Cleartrip, Easemytrip, Paytm, Expedia do
not seem to impose any competitive constraints on MMT-Go.
25. Additionally, the DG analysed size and resources of the MMT-Go which shows that turnover
of the MMT-Go has been increasing continuously over the years. It has increased from Rs. 3646
crores in the year 2016-2017 to RS. 4729 crores in the year 2019-2020. In terms of comparative
size and resources, Booking.com and its subsidiary Agoda were found to be having larger
turnover followed by MMT-Go but the turnover of MMT-Go was INR 3646 crore in 2016-2017
which increased to INR 4596 crore in 2018-2019.
26. Out of the 16 hotels and 5 hotel chains from where the DG collected responses, it was
seen that most of the hotels placed reliance on the offline mode of booking. However, within the
online mode, the hotels give preference to MMT-Go over other OTAs because of their wider reach
and popularity, greater visibility, higher bookings and more traffic. With regard to the budget
hotel chain segment, while certain chains focus on the offline channel, chains
like place much more reliance on the online channel for reasons
such as large volume of business, large customer base and high conversion ratio. Moreover, out
of 21 hotels and hotel chains, from where the DG collected responses, 16 (76%) have submitted
that they prefer to list their hotels on MMT-Go's websites for the reasons that it has pan India
presence, covers wider areas of local market, increases visibility of their properties and attract
more business.
27. The DG reported that with the increase in the internet penetration and current pandemic
situation, more and more people are likely to shift towards online mode of booking. Thus, the
dependence of consumers, i.e., hotels as well as travelers on OTAs is likely to increase in the
coming years. Further, as per Treebo, its average online booking constituted
almost of its total bookings during 2016, which declined to in 2017
and further to in the year 2020. Additionally, bookings made through MMT-Go by
FabHotels as a proportion of total online booking was in the year 2016-2017
and in the year 2017-2018. It indicated that reliance of FabHotels on MMT-Go
increased during 2016-2017 and 2017-2018. In 2018-2019, after the termination of contract
with MMT-Go, the proportion of bookings through MMT-Go declined substantially to
and became in 2019-2020.
28. The DG also reported that MMT-Go has more than 45,000 properties listed on its platform,
due to which the customers also prefer MMT-Go over other OTAs. Further, MMT-Go offers several
benefits and features, which coupled with its market position has resulted in network effects.
Further, due to large number of visits by customers on the site of MMT-Go, more hotels choose
MMT-Go as their preferred OTAs leading to network effect.
29. Further, the DG examined that MMT-Go and OYO entered into vertical commercial
agreement and pursuant to the said agreement, the number of properties listed on OYO increased
to in 2019 from in 2018. Vertical integration between MMT-Go and OYO
on account of this commercial arrangement has resulted in increase in the number of consumers
who book hotels on MMT-Go website and consequent influx of hotel owners to list their hotels on
MMT-Go platform.
30. The DG also analysed about the ability of MMT to offer deep discounts, which creates
distortion in the supply side of the market. New entrants or small competitors are unable to
diminish the value of their services at the same level as MMT because of their lack of financial
standing and limited initial user base. The statement of third party OTAs show that the key to the
dominant position held by MMT was its ability to offer discounts to customers with which many
OTA could not compete. Further, MMT's conduct lessened the competition in the market by
restraining new competitors and harmed consumer welfare as well by virtue of limiting the choice
of customers. MMT-Go possesses large inventory data along with high consumer outreach, which
creates network effect and thus, provides it with competitive advantage. Thus, by virtue of
vertical integration causing exclusion of key players and network effects, MMT-Go has been able
to create entry barriers in the market.
31. As per the DG's report, after the merger of MMT with GoIbibo in 2017, the market share of
-----------------------------------------------------------------------------------------------------------------------------------------------------------
MMT-Go has increased. Further, vertical integration between MMT-Go and OYO which led to
exclusion of FabHotels and Treebo from the MMT-Go's platform reduced the bargaining power of
chain hotels as well as independent hotels. This was evident from the numerous attempts made
by FabHotels and Treebo to reinitiate their business with MMT-Go. Therefore, the argument of
MMT-Go that FabHotels and Treebo had bargaining power according to the DG was not
substantiated in the current scenario. Rather failed attempts of FabHotels and Treebo to resurrect
their businesses on MMT-Go strengthened the argument that MMT-Go has the countervailing
buying power, according to the DG.
32. Based on the above-mentioned observations, the DG reported that MMT is a dominant
player in the relevant market for “online intermediation services of hotel bookings in India.”
33. To examine the alleged abusive conduct of MMT-Go, the DG reviewed the impugned
clauses of the entered into between MMT-Go and FabHotels and Treebo. It was
seen that Clause 2.3 of the dated 21.09.2017 required FabHotels
to . Similarly, Clause 2.3 of
the dated 18.10.2017 required Treebo
to
34. Further, the DG examined the agreement between other OTAs and hotel partners and
observed that rate parity clauses are imposed by all the OTAs in India and it is an industry
practice. While Booking.com, Agoda, Expedia and Cleartrip have imposed room as well as rate
parity, other OTAs such as Yatra, EaseMyTrip and Paytm have imposed only rate parity.
35. In order to assess impact of rate parity on hotel's businesses, the DG collected information
from independent hotels/hotel chains. Out of 21 respondent hotels/hotel chains, seven hotels
submitted that price parity affected their business adversely. The reasons cited by these hotels
include adverse effect on offline rate, erosion of customer base, etc. It was also stated that rate
parity reduces competition between OTAs. Further, it was observed that the practices of OTAs of
giving deep discounts after maintaining price parity affects direct bookings of hotels.
36. The DG also examined the cases related to price parity clauses in international
jurisprudence and observed that wide price/rate parity has been found to be anti-competitive.
However, in India, price and room parity clauses are implemented widely by all OTAs in hotel
industry.
37. The DG observed that FabHotels entered into agreement with MMT-Go on 21.09.2017
however, MMT-Go has imposed room and price parity obligation before entering into
the . This is evident from the email evidences provided by
FabHotels.
38. The DG also examined the evidence submitted by FabHotels and FHRAI which showed that
MMT-Go was not only monitoring the price parity but also ensured that price parity is maintained.
MMT-Go also threatened that the visibility of the property would be reduced if there is continuous
disparity in rate and inventory with respect to competitors of MMT-Go. The DG also observed that
though evidences indicate other OTAs indulgence in maintaining rate parity, however, due to the
dominant position enjoyed by MMT-Go, anti-competitive impact of such clauses is exacerbated.
39. Such imposition by MMT-Go was found to be creating barriers to new entrants in the
market, besides driving existing competitors out of the market. Competition between OTAs will
reduce commission rate for hotels. Further, the DG observed that on one hand, MMT-Go demands
price parity, on the other hand, they themselves sell rooms at lower prices and gain loyalty of
hotel's original customers. In the long run, such conduct may lead to erosion of client base of
hotels. Rate parity was also found to be having the impact of restricting choices available to
customers. The DG noted that Paytm first launched the hotel booking services in 2016, but these
services were then shut down and relaunched in April 2019. Also, HappyEasyGo entered the
travel industry in 2017. Thus, the DG was of the view that after the merger of MMT with GoIbibo,
which led to dominance of MMT-Go in the relevant market of online intermediations services of
hotel booking in India, no new player has entered into the market. Further, imposition of rate
parity and deep discounting practices of MMT-Go were observed to be affecting global players like
Expedia and Booking.com, as was evident from their declining market shares. Additionally, such
practices were not found to be leading to any improvements in production or distribution of goods
or provision of services; or promotion of technical, scientific and economic development by means
of production or distribution of goods or provision of services. Considering the above, the DG
found the rate parity and room parity clause to be in contravention of Section 4(2)(a)(i) read with
Section 4(1) of the Act.
-----------------------------------------------------------------------------------------------------------------------------------------------------------
40. As regards predatory pricing, the DG noted that expenses incurred by MMT-Go in relation
to the bookings mainly include payment gateway costs, call centre costs, personnel costs, brand
and other platform level marketing costs and other fixed costs, losses incurred by MMT-Go for
hotel dishonoured bookings, losses incurred for compensating unsatisfied consumers, etc. In
addition to these expenses, MMT-Go also provides various types of discounts to the customers
such as e-coupon, cash back on various cards used by consumers for booking
hotels/accommodations. The DG collected the financial data from MMT-Go including audited
financials and trial balance for the FY 2015-2016 to 2020-2021 and reorganised it to arrive at
average variable cost. Based on this, the DG found that the average room revenue is less than
the average variable cost during the period under investigation i.e. during 2017-2018 to 2019-
2020. During the said period, MMT-Go has incurred a net loss on per room night basis. Moreover,
the DG noted that MMT-Go has been in business since the year 2000 and hence this practice
cannot be termed as introductory or aiming at building the network. Further, the SEC filings
(filed annually by a publicly-traded company about its financial performance and is required by
U.S. Securities and Exchange Commission) made by MMT-Go show that the significant
investments were made in the past years in customer acquisition programs, expansion of hotels
and packages offerings etc., which are part of its long-term strategy to increase the net revenue
contribution of its hotels and packages business. Also, MMT-Go merger took place in the year
2017 after which the market share of MMT-Go increased substantially making MMT-Go a
dominant player in the relevant market.
41. MMT-Go has submitted before the DG that its discounts (and final sell rates to customers)
have no impact on the amount paid to the hotel as it solely depends on the Best Available Rate
(BAR) and the commission agreed and that the discounts given to the consumers are solely
borne by MMT-Go. However, the DG noticed from the responses of the hotels that there is a
negative effect of promotions in the form of discounts and cash backs on their business. The
hotels have incurred losses in the form of loss of future revenue from their own online/offline
business at those basic rates, and it also led to harm to their reputation. Further, though MMT-Go
has stated that the Hotels had the option to exercise the ‘Do Not Discount’ (DND) option, some
hotels specified the difficulty in exercising the DND option which required multiple efforts to
effectuate.
42. The DG also noted that MMT-Go mentioned that they enter into a standard clickwrap
agreement with all hotel partners, as per which a ‘Sell Rate’ is notified by Hotel to MMT-Go as the
listing price of the Hotel room, including any applicable government taxes and Goods and
Services Tax (‘GST’) unless otherwise stated, at which the customer would confirm the room
through MMT-Go. However, the Agreement enables MMT-Go to offer certain promotions to the
customers. Thus, the agreement gives MMT-Go the sole discretion to offer promotions in the form
of discounted prices.
43. The DG also compared the discounts provided by MMT-Go with the global OTAs like
Expedia and Booking.com and observed that the largest number of room nights on which more
than 30% discount was provided during the relevant period were booked through MMT-Go. The
DG, thus, concluded that MMT-Go has engaged in deep discounting and predatory pricing thereby
contravening Section 4(2)(a)(ii) of the Act.
44. The DG next examined the commercial arrangement/agreement between MMT-Go and
OYO, vide which MMT-Go delisted the hotels partners of FabHotels and Treebo from its platforms,
to assess whether the same has led to denial of market access by way of refusal to deal under
Section 3(4)(d) of the Act. FabHotels and Treebo submitted that the unfair and arbitrary
termination of the Agreements resulted in sudden loss of the most significant revenue stream
and access to a wide customer base. Further, Treebo submitted that MMT-Go refused to list any
of the independent hotels which were live on Treebo's platform even under the Superhero
program on MMT altogether.
45. Neither MMT-Go nor OYO refused the existence of the commercial arrangement before the
DG. They rather sought to justify the said arrangement being a commercially negotiated
arrangement. MMT-Go stated that OYO was an unavoidable trading partner as in terms of size
and geographic spread, OYO's inventories were exponentially larger than that of FabHotels and
Treebo (combined or otherwise) and due to the OYO agreement, MMT-Go was able to secure a
larger selection of competitively priced inventory for its customers, thus, there were clear benefits
that were accruing to the consumers from the said agreement. It was also submitted that the
clause relating to the delisting obligation does not constitute an abuse of dominance by MMT-Go
-----------------------------------------------------------------------------------------------------------------------------------------------------------
as it is on account of the restriction imposed by OYO on MMT-Go.

46. OYO also stated that in order to enable independent hotels to improve occupancies and
earnings, it needed the widest distribution channels for providing greatest visibility to its hotel
partners. From OYO's perspective, given the experience with MMT-Go, OYO wanted deeper
relationships with its OTAs as the listing on additional OTAs required engagement of fulltime
resources on both sides, as well as ongoing technical interface. Therefore, OYO wanted to have
the commitment and longer-term stability from MMT-Go, as OYO was offering a large inventory of
hotels for visibility on MMT-Go, which ultimately offered significant benefits to users/customers at
large. OYO stated that MMT-Go publicly acknowledged that in light of a massive surge in budget
hotels category igniting the growth in the hospitality sector, it saw the commercial arrangement
with OYO as a means to help build synergies in the fragmented hotels segment and serve MMT-
Go's customers by giving an even wider spread of quality hotels to choose from, while continuing
to drive growth in online booking of hotels. In addition, OYO has submitted that MMT-Go is not a
significant channel of booking for OYO as out of OYO's total revenue in FY2020, its revenue
generated from bookings on MMT-Go was minimal.
47. The DG noted that MMT-Go and OYO entered numerous agreements, the first agreement
was entered into on . This agreement
specified . This agreement was valid for one year.
Second agreement was signed on . As per this
agreement .
48. Further, in October 2015, MMT and Ibibo de-listed hotel partners associated with OYO from
their platforms citing quality related issues. OYO stated that nearly three years later, in 2018,
that MMT-Go re-listed OYO's hotel partners on its portals through
the
49. Thereafter also, certain amendments were introduced in the contractual arrangement
between OYO and MMT-Go. However, the exclusivity that OYO enjoyed to the exclusion of
FabHotels and Treebo seemed to exist.
50. Based on the submissions of FabHotels, the DG observed that though the number of
properties live at the end of the month has increased even after the termination of the
agreement, when MMT-Go terminated the with FabHotels in March, 2018, the
number of room nights booked through OTAs declined substantially. Further, there was a
significant drop in revenue earnings after the termination of agreement by MMT-Go. As regards
Treebo, the DG noted that the number of live Treebo properties have declined pursuant to
delisting by MMT-Go. Further, the gross booking value, value of booking from OTA declined
marginally after delisting of Treebo from MMT-Go's platform. It recovered six months leading to
Covid-19 outbreak. However, the gross booking value, OTA booking value as well as revenue had
declined substantially after Covid-19 outbreak. In addition, it was observed that number of
superhero properties live on MMT-Go has declined substantially after delisting of Treebo from MMT
-Go's platform and became zero from April 2020 onwards.
51. The DG also noted that since the other OTAs did not pose much of a competitive constraint
on MMT-Go, the ability of FabHotels and Treebo to list on other platforms would not sufficiently
offer a competition to OYO which would be able to ensure the widest outreach and better visibility
over these players by reason of the delisting clause.
52. Based on the analysis, the DG concluded that as a consequence of the delisting from the
MMT-Go platform due to the OYO and MMT-Go agreement, FabHotels and Treebo were driven out
of the business of franchising budget category hotels in India. Moreover, in order to effectively
compete with OYO, its competitors needed to ensure that its hotels were able to be viewed by
maximum customers and thus attract more hotels to partner with them. Subsequent to the
delisting from MMT-Go platform, both FabHotels and Treebo were unable to ensure these services
to the hotels and thus, no longer match the level of viewership ensured by OYO. Thus, the
-----------------------------------------------------------------------------------------------------------------------------------------------------------
commercial arrangement/agreement between MMT-Go and OYO restricted the access to the MMT-
Go portals, thereby preventing OYO's competitors FabHotels and Treebo from being able to
effectively compete with OYO. Therefore, the said agreement resulted in a foreclosure of
competition by hindering entry into the market.
53. From the consumers' perspective, the DG observed that the choice of inventory was
narrowed down to the properties offered by OYO. In the absence of this agreement, FabHotels
and Treebo would have been able to list their properties on MMT-Go and give a wider choice in
terms of brands whose services they could choose to avail. Further, unbranded hotels managed
by these Informants were also deprived of the opportunity to be viewed by a large selection of
consumers. The availability of wider choice of branded and unbranded hotels would be beneficial
to the consumers. Thus, consumers were not able to draw much benefit from the OYO
Agreement.
54. Further, MMT-Go's engagement with other players in the market would improve their
ability to compete with OYO on a level playing field and the competition amongst these players in
the market to gain more attention from consumers would have also resulted in improved service
quality and better pricing.
55. Thus, the DG concluded that the agreement between MMT-Go and OYO resulted in an
appreciable adverse effect on competition in terms of the factors provided under Section 19(3) of
the Act. Hence, the DG concluded that the commercial agreement/arrangement between OYO and
MMT-Go was in contravention of Section 3(4)(d) read with Sec 3(1) of the Act.
56. As regards misrepresentation of information, the DG observed that the hotels which are
shown closed at the portals of MMT-Go have suffered due to the fact these hotels were actually
active during this period and consumers were misled to believe that these hotels are closed. The
DG opined that if any consumer makes any search for any properties on MMT-Go's platform and
finds the same to ‘sold out’, there is a little possibility that such consumer will try to find the
same property on other OTAs which can not only have adverse impact on the business of the
concerned hotel but it will also restrict consumer's fair choice to choose hotels. Finally, the DG
concluded that by showing such misleading information and creating information asymmetry in
the market, the conduct of MMT-Go has the potential to deny market access to the concerned
hotels.
57. Besides the aforesaid, the Informants had also alleged that MMT-Go is charging exorbitant
commission, much higher than the industry average which was not found substantiated during
investigation. Similarly, allegation related to hotel service fees was also not found to be
contravention of the provisions of the Act by the DG.
Objections/Suggestions/Submissions of the Parties to the Investigation Report
58. The non-confidential version Investigation Report was forwarded to the parties vide order
dated 26.10.2021, with directions to file their respective suggestions/objections to the
Investigation Report. Further, on a request made by OYO and MMT-Go, seeking access to the
unredacted version of the Investigation Report and records, the Commission decided to set up a
confidentiality ring vide order dated 15.12.2021, further modified vide order dated 04.01.2022.
59. Subsequently, on 10.03.2022, MMT-Go filed an application, identifying 10 witnesses who
had deposed before the DG through statements and affidavits and sought cross-examination with
respect to them. Vide order dated 16.03.2022, the Commission considered the cross-examination
application filed by MMT-Go and decided to grant an opportunity of cross-examination to it, with
regard to six witnesses whose depositions were recorded by the DG during investigation. The DG
was accordingly directed to conduct cross-examination of the individuals/witnesses, as allowed
by the Commission in the said order, and submit a report on the same within 45 days.
60. After seeking extension of time, the DG submitted the Cross-Examination Report on
10.06.2022 and 14.06.2022, in confidential and non-confidential version, respectively. This
report was considered by the Commission on 22.06.2022. the Commission observed that the
Cross-Examination Report submitted by the DG contains cross-examination of three individuals,
out of the six allowed by the Commission. As regards remaining three individuals/witnesses, two
individuals, namely, Ms. Ritu Mehrotra, Booking.com and Mr. Balu Ramachandran, Clear Trip Pvt.
Ltd., could not be cross-examined at all, while one witness (namely, Nishant Pitti, Easy Trip
Planner Ltd.) has been partially cross-examined. In the interest of expediency, however, the
Commission decided to forward the non-confidential version of the Cross-Examination Report,
containing cross-examination of three individuals to the parties. As regards the remaining three
individuals who could not be cross-examined, namely, Nishant Pitti, Easy Trip Planner Ltd., Ms.
-----------------------------------------------------------------------------------------------------------------------------------------------------------
Ritu Mehrotra, Booking.com and Mr. Balu Ramachandran, Clear Trip Pvt. Ltd., the Commission
decided not to rely on their statements given before the DG during investigation. The parties
were directed to file their suggestions/objections to the Investigation Report including the Cross-
Examination Report, if any, latest by 22.07.2022 and exchange a copy thereof inter se, in
advance. The parties were also given liberty to file rejoinder to each other's
objections/suggestions, if any, latest by 01.08.2022 and provide a copy thereof in advance to the
other parties. The hearing in the matter was scheduled on 17.08.2022 and 18.08.2022, which
dates were later changed to 12.09.2022 and 13.09.2022, respectively. The parties were
extensively heard on these dates. The submissions made by the parties during the proceedings,
has been briefly reproduced in the ensuing paras.
MMT-Go
61. MMT-Go filed a common response to the Investigation Report, including the Cross-
Examination Report, whereby they have raised certain preliminary issues along with their
objections on the merits of the matter.
62. At the outset, MMT-Go has argued that the cross-examination conducted by the DG was
incomplete and ineffectual in many respects. It is submitted that despite their express request to
hold cross-examinations in physical modes, the DG decided to conduct the cross-examination
through Virtual Conferencing (‘VC’) mode. This undermined the effectiveness of the cross-
examination. Further, the unwillingness on part of the witnesses to cooperate in the cross-
examination proceedings, as well as material procedural irregularities, also caused serious
prejudice to MMT-Go. The witnesses were not allowed to be confronted with their own documents
or previous submission and several important questions were disallowed by the DG without any
reason. Despite repeated requests by MMT-Go, the demeanor of the witnesses was not recorded
by the DG.
63. MMT-Go further submitted that out of six witnesses allowed by the Commission to be cross
-examined, only one witness, i.e., Mr. Ang Choo Pin (Expedia) was effectively cross examined. As
regards the other witnesses, either they did not appear before the DG or their cross-examination
was incomplete as they failed to provide the additional information and clarifications despite
undertaking to respond to the outstanding questions. With regard to the queries posed to Mr.
Vaibhav Aggarwal (FabHotels), it was stated that though FabHotels filed its response on
27.06.2022, and the confidential version of this response was only received by MMT-Go on
29.07.2022.
64. MMT-Go then submitted that though the Commission decided, vide its order dated
22.06.2022, not to rely on the statements of 3 out of the 6 witnesses who were allowed to be
cross-examined but whose cross-examination could not take place, the Commission did not direct
the DG to submit a fresh Investigation Report reviewing its findings in light of the order dated
22.06.2022. Further, it has also been submitted that the cross-examination report ought to have
analysed the new material which has come on record instead of only annexing the cross-
examination transcripts. Such review, as per MMT-Go, is necessary, in the absence of which the
right of MMT-Go to have a fair investigation is severely prejudiced. Also, such review would have
assisted the Commission in arriving at a fair and accurate decision.
65. MMT-Go have also alleged that FabHotels and Treebo approached the Commission for their
own ulterior motives. As regards Treebo, it has been alleged that it is purely driven by
commercial business interest and that the statements of its founder during cross-examination
contradict the submissions made in the Treebo's Information and its subsequent filings. As
regards FabHotels, it has been alleged that though its entire claim is based on the huge losses it
has suffered in terms of growth post the delisting from MMT-Go platforms, response filed by it
pursuant to the questions asked during the cross examination reveal that its revenue from
operations doubled in FY 2019-2020 from the FY 2018-2019.
66. MMT-Go also argued that the Investigation is devoid of any useful economic analysis and
several concepts have been wrongly applied. MMT-Go has annexed an expert economist report
prepared by Mr. Justin Coombs of Compass Lexecon (hereinafter, ‘MMT-Go Economist Report’)
which as per MMT-Go captures the economic realities and competitive conditions in a better
manner.
67. Besides the aforesaid preliminary objections, MMT-Go has also challenged the DG's
delineation of relevant market, assessment of dominance and findings on conduct.
68. As regards the relevant market, MMT-Go has criticised the DG's conclusion stating that the
said conclusion is based on (i) an erroneous analysis of “substitutability” between the online and
-----------------------------------------------------------------------------------------------------------------------------------------------------------
offline hotel booking channels; and (ii) an incorrect assumption that OTAs offer a unique service
i.e., the “search, compare, book” (“SCB”) functionality.
69. The DG's “substitutability” analysis has been termed erroneous on the ground that it relies
on a survey of twenty-one (21) hotels i.e., sixteen (16) standalone and five (5) chain hotels, and
incorrect understanding of the statements made by OYO and other OTAs. This is stated to be an
insignificant sample size out of the vast universe of hotels in India which is not geographically
representative. Further, it is stated that the survey results are biased as all the chain hotel
respondents who were surveyed by the DG were proposed by Treebo and some of the hotels,
especially the respondents who have raised issues against MMT-Go business practices, were
members of FHRAI. Therefore, there is a high likelihood of strategic bias in the responses
provided by these respondents/hotels which were cherry-picked by the DG.
70. In the MMT-Go Economist Report, which has been relied upon by MMT-Go, a survey carried
out by Kadence, a market research agency, has been annexed. MMT-Go has submitted that the
Kadence Survey is based on information from a more statistically representative sample of hotels
comprising five hundred and twenty-four (524) hotels located across fifty (50) cities. The SCB
functionality test, relied upon by the DG, is erroneous as it is based on old decisions by
competition law authorities in foreign jurisdictions. It is submitted that the DG has not
undertaken any consumer facing survey in support of the proposed relevant market and the DG
has only undertaken a hotel survey in an unscientific manner, which has not been analysed
correctly. The statements of OYO and OTA's have also been quoted out of context, without due
verification.
71. Further, MMT-Go has stated that the DG has not properly analysed the responses of these
respondent/hotels. Out of 21 hotels, only 18 were responsive on the question of substitutability
and out of those 18 hotels, only 4 conclusively said that they would not shift in the event of a five
per cent (5%) rise in commissions which constitute merely twenty-two percent (22%). The DG
however, considered the inconclusive or qualified responses of the parties also and reached a
conclusion that 76% of the respondent hotels stated that they will not shift to offline mode even
if the OTAs increase their commission by 5%.
72. MMT-Go has further argued that the framing of question by the DG to assess
substitutability of OTAs with offline channels of distribution has been done erroneously to assume
that OTAs is the only form of online distribution. It is submitted that a particular room can be
offered by a hotel/accommodation and booked by a consumer through one or more online and
offline distribution channels. DG has either failed to understand, or intentionally ignored that
online distribution channels comprises various other distribution channels such as ‘online
direct’ (where a booking is made online on a hotel's website) as well as bookings made through
other online intermediaries such as hotel aggregators, marketplaces offering accommodation
services, social media sites and super apps and bookings made through social media.
73. Further, to counter DG's conclusion on the complementarity of online and offline modes,
MMT-Go submitted that the multi-channel distribution strategy adopted by hotel partners shows
inter se competition between distribution channels and not complementarity and it is being
utilized by hotels to maximize revenue, in light of the daily perishable nature of the end product
i.e., room night. Depending on various price and non-price factors, hotels may completely switch
or partially skew their allocation or distribution in favour of one or more channels. Notably,
booking a hotel room on one channel leads to a reduction of inventory across all channels.
Therefore, the distribution channels cannot be said to be ‘complementary’, merely because a
hotel is using various booking distribution channels at the same time. On the other hand, the
mere fact that a hotels' preference for a particular channel is at the cost of another, demonstrates
that the different distribution channels compete with each other.
74. MMT-Go further criticised DG's approach of not conducting a market survey to assess
consumer preference which is relevant considering the two-sided nature of the markets, as in the
present case. While the DG has attempted to conduct a survey vis-à-vis hotels on this issue, it
has made no such attempt in relation to consumers in India. Consequently, there is no SNNIP
analysis, or even secondary market data (by way of market reports) to assess whether consumers
switch between offline and online channels while booking their hotels in India. This, as per MMT-
Go, was imperative as an OTA platform does not operate in isolation, catering exclusively to
either the hotel side of the platform, or the customer side of the platform. It operates as an
intermediary “matching” or “facilitating” transactions between two different user groups with
interdependent demand.
-----------------------------------------------------------------------------------------------------------------------------------------------------------
75. MMT-Go has further criticised DG's reliance on German Bundeskartellamt's HRS decision,
and the Priceline/Momonda case while distinguishing OTAs from other online distribution
channels such as Google, meta search service providers etc. stating that market analysis
contained in EU's regulatory decisions cannot be supplanted into the Indian context due to
differences in market structure and realities. It is submitted that 92% of hotels in India fall
within the unorganised segment of the overall market for hotels rooms and the unorganised
sector generates only 11% of its bookings through online channels. This shows that, unlike
matured markets such as EU and USA, the supply side conditions in the Indian hospitality sector
are not mature enough to support a distinct online market for booking of hotels in India. Placing
reliance on Google-Bain Report (published in April 2019), MMT-Go has submitted that the
bookings are predominantly made through offline channels in India. The said Report shows that
in terms of consumer spends, only 26% of the hotel bookings were made online (which apart
from the OTAs include the bookings made directly through the portals of the
hotels/accommodations, websites, super apps, payment apps etc.), as of 2018. Further, it is
submitted that in terms of consumer spends, walk-ins and phone booking (directly with the
hotels) accounted for a total of fifty-one percent (51%) of the hotel bookings; while the
remaining twenty-three percent (23%), in terms of consumer spends, were made through offline
travel agents and unorganised intermediaries. To further substantiate its claim, MMT-Go has
relied upon Kadence Survey which forms the basis of MMT-Go Economist Report annexed with
MMT-Go's response, which indicates a sizeable share of walk-ins (i.e., 28%) in India, as Indian
consumers are more likely to : (i) inspect the property in person; and (ii) plan last-minute trips.
This can be directly compared to Europe where only 3.7% of hotel overnight bookings in 2019
were through the walk-in channel.
76. MMT-Go has also made other claims like comparatively low internet penetration in India
and Indian consumers being more price-sensitive. While European consumers are stated to be far
less price-sensitive with respect to leisure travel, Indian consumers are stated to make their
bookings through the cheapest available channel. This is done to counter DG's reliance on
European case laws for delineating relevant product market.
77. MMT-Go has further stated that DG's conclusion on relevant market is based on the
incorrect interpretation of the statements given by certain individuals, which have since been
excluded from the record, vide order of the Commission dated 22.06.2022.
78. In view of the above, it is stated that DG's analysis on the issue of relevant market is
fraught with inconsistencies and evidences a clear bias towards rejecting the substitutability
between OTAs and other online and offline booking channels and is, therefore, liable to be set
aside. In addition to the above, MMT-Go has also placed on record its Economist Report to
present the economic rebuttals to DG's analysis of the Investigation Report.
79. The MMT-Go Economist Report, inter-alia, relies on the publicly available information;
surveys performed by Kadence International commissioned by Compass Lexecon (“Kadence Hotel
Survey” and “Kadence Consumer Survey”, together referred to as the “Kadence Survey”) as well
as a market report prepared by Mordor Intelligence commissioned by the economist firm which
also prepared the MMT-Go Expert Economists Report i.e. Compass Lexecon (“Mordor Intelligence
Report”). The Kadence survey was performed on the basis of face-to-face interviews with
consumers and hotels; whereby 2002 adults who had made an online hotel or travel package
booking in the last four years, covering a range of age and income groups and 524 hotels which
sell hotel rooms through OTAs, covering both independent and chain hotels, and budget, mid-
range and luxury hotels, were surveyed. The survey included questions on how hotels decide to
apportion their inventory across the various distribution channels, and how those consumers who
have booked using OTAs use the alternate distribution channels. The main contentions/assertions
made in the report are captured briefly in the following paras. Hotel rooms can be distributed via
a number of channels, including (i) directly by hotels (via their websites, phone calls, walk-ins,
corporate tie-ups, and social media), and (ii) indirectly via intermediaries (for example online
travel agents, offline travel agents, and informal mediums). Some of these channels operate
online (such as hotel websites, social media and online travel agents) while others operate offline
(such as phone calls, walk-ins and offline travel agents). It is stated that the primary distribution
channel of hotel rooms in India are offline channels, which account for approximately 74% of the
spends on hotel room bookings. The online segment of the hotel industry is in its nascency and
undergoing rapid changes. In particular, it is growing rapidly and is witness to a change in
business models and the development of franchise chains.
-----------------------------------------------------------------------------------------------------------------------------------------------------------
80. As regards the relevant market, the MMT-Go Economist Report argues that the relevant
market defined by the DG is too narrow. When defined correctly, the relevant product market is
not wider than the overall hotel booking market and not narrower than online hotel booking
market. Consumers substitute between OTAs and other channels, and hotels also substitute
between OTAs and other channels.
81. MMT-Go operates a platform which provides two distinct sets of services to two distinct
sets of users : consumers and hotels. The DG has ignored the demand-side substitutability of the
consumer side of the market in its assessment of the relevant product market, which ought to
have been taken into consideration given the two-sided nature of the market.
82. Typically, two-sided platforms will make pricing decisions in a way that increases the
volume of transactions on their platform and attract more and more hotels and consumers. In
addition, when two-sided markets are nascent, the pricing policy is typically also designed to
induce potential users to adopt the platform. This could imply that prices are lower in the early
stages, and only increase to their long run equilibrium when sufficient users have adopted the
platform. Given that prices on the two-sides of the platform are linked, any market definition
exercise should account for both sides of the market. Further, though the SSNIP question
remains the same, the assessment of profitability changes for two-sided platform markets. If
sufficient hotels move away a sufficient part of their inventory to other channels in response to a
SSNIP, this also has an impact on the consumers' incentives to adopt the platform. If the
consumers find that the inventory of the OTA platform is insufficient for their liking, they may
choose to use alternative channels. In addition, when hotels pay the higher commissions, they
may choose to pass-on some of these increased commissions to consumers. The increase in
consumer prices and the decrease in choice may, in turn, reduce the rate at which consumers
make use of or book through OTAs. This could result in a vicious cycle where, as a result of the
increase in commissions, some consumers may reduce their use of the platform, which further
reduces the hotels' incentives to keep inventory on the OTAs, which makes the platform even less
attractive to consumers, and so on. Therefore, the loss to the hypothetical monopolist from an
increase in commissions can be much greater than it would be in a one-sided market, and a
SSNIP that was profitable in a one-sided market may not be profitable in a two-sided market.
Therefore, it is important to account for both sides of the market, including consumers, while
defining the relevant market in the present case.
83. Thus, the MMT-Go Economist Report argues that the relevant market is wider than that
defined by the DG, while also submitting that it is not necessary to conclude on a precise
delineation of the market because MMT-Go's market position is not indicative of dominance under
either of the market definitions proposed in the said Report.
84. The MMT-Go Economist Report primarily relies on four grounds to suggest this wider
market.
a. Firstly, the evidence suggests that consumers that book on OTAs substitute sufficiently
between OTAs and other distribution channels. There is evidence that consumers multi-
home across several channels. Applying different parameters to the data collected through
the Kadence Survey, the Report argues that 55% of consumers had used more than one
channel to book hotel rooms over the past four years, including OTAs, walking in, and
calling the hotel directly. Further, 89% of consumers were found to have considered more
than one channel to search for the right hotel over the past four years. This included
searching for hotels via price comparison websites (which was used by 47% of consumers),
calling the hotel directly (which was used by 47% of consumers) and visiting hotels'
websites (which was used by 45% of consumers). Further, the Kadence Survey found that
when a booking that was ultimately made on the OTA, 74% of consumers checked at least
one more channel before making that booking, while 47% checked more than one channel
before making the booking. This includes price comparison websites (which were considered
by 42% of OTA consumers), calling the hotel directly (which was considered by 38% of OTA
consumers) and booking on the hotel's website (which was considered by 33% of OTA
consumers). Thus, MMT-Go criticised DG's claims that consumers have limited incentives to
substitute across channels because of room and price parity arrangements. The variation in
effective prices of rooms across distribution channels because of ad hoc discounts in the
form of special bank rates and credits to the mobile wallet as well as differences in services
offered (for example free breakfast) incentivise the consumers to look for a better deal by
considering a range of channels before making their booking. Further, even at the same
-----------------------------------------------------------------------------------------------------------------------------------------------------------
price, consumers may choose to substitute depending on other factors like convenience, for
example with a travel agent they have an existing relationship with. This is also consistent
with the evidence from the Kadence survey where 44% of consumers considered ease or
convenience of use and 40% considered convenient payment options as one of the top three
factors when deciding a distribution channel. Lastly, it is claimed that consumers face little
to no costs when switching between distribution channels, especially online channels.
Lastly, the MMT-Go Economists report also found flaw with the DG's reliance on SCB
functionality test stating that online direct channels can offer seamless SCB functionality via
search engines/metasearch engines; and also, that online direct channels of franchise
chains like FabHotels and Treebo already allow consumers to search and compare a range of
hotels, much like OTAs.
b. Secondly, the evidence suggests that hotels that sell their rooms via OTAs substitute
sufficiently between OTAs and other distribution channels, such that if there was a small
but significant increase in the commission charged by the OTA, a sufficient number of them
would move their inventory to alternative distribution channels. It is stated that there is
evidence that hotels that sell their rooms via OTAs multi-home across several channels. The
Kadence survey found that 100% of hotels that sell their rooms via OTAs use another
channel to distribute their rooms. This included booking directly via a phone call (which was
offered by 92% of hotels), booking via corporate tie-ups (which was offered by 62% of
hotels) and booking directly via their website (which was offered by 60% of hotels). To
check whether hotels genuinely consider these channels as substitutable in their ordinary
course of business, the Report assessed whether the consumers substitute away from OTAs
during changes in demand. These include periods of peak holiday seasons, peak days like
weekends and event days, for example conferences, sporting events or weddings. During
periods of high demand, a hotel will likely find it easier to sell room nights directly and may
make less use of intermediaries (whether they be online or offline). This substitution allows
it to distribute its rooms but at the same time save on the commission it would need to pay
to the intermediaries. Further, the inventory and booking data of MMT-Go for a sample of
cities, days and events, show that there are discernible patterns that suggest that hotels
substitute away from OTAs over peak seasons, peak days and event days. As per MMT-Go,
all this suggests that the hotels consider various channels as substitutes in their ordinary
course of business.
c. Thirdly, it is argued that the European precedents the DG relies on do not apply in this case
because the Indian market is fundamentally different from the European market. There is
much higher substitution between online and offline channels in India. Further, the Indian
consumers have very different preferences to European consumers. Indian consumers tend
to be more price sensitive, and prefer ‘walk in’ to book hotels only after they inspect the
property, suggesting that they would be more likely to substitute between the channels.
Further, the online market is not as well developed in India as it is in Europe.
d. Fourthly, the survey results the DG relies on are fraught with errors. The survey question
does not make sense for hotels that use non-OTA online distribution channels (such as their
own website). These hotels would certainly not remove booking functionality from their own
website in response to an increase in commissions on an OTA, and this is clear from some of
the qualitative responses. Further, the DG's question does not account for scenarios in
which hotel's may reduce their allocation in response to a SSNIP. It only asks whether
hotels would completely delist from a distribution channel in response to a SSNIP, which is
unlikely in a market where hotels multi-home. Lastly, the sample includes only 21 hotels,
which is too small a sample from which to draw any meaningful conclusions (in comparison
the Kadence survey covered 524 hotels).
85. MMT-Go has agreed with the DG's delineation of the relevant geographic market, i.e. the
whole of India.
86. On dominance, MMT-Go has argued that it cannot be considered dominant in the online
hotel booking market for the following reasons:
a. the market position of MMT-Go and its competitors does not indicate dominance;
b. barriers to entry are limited and there is potential for competition from other players; and
c. hotels exercise significant countervailing buyer power.
87. With regard to dominance, MMT-Go stated that the DG's ‘Theory of Gatekeeper’, as
mentioned in the Investigation Report, is devoid of any legal basis. The “digital gatekeeper”
-----------------------------------------------------------------------------------------------------------------------------------------------------------
construct does not have any legal basis in India or in other jurisdictions. Even in the EU, the
Digital Markets Act (“DMA”) would only be applied on an ex-ante basis from April 2023 onwards.
88. There is no evidence to suggest lack of multi-homing as concluded by the DG. The
Kadence Survey indicates that there is prevalence of multi-homing in the market. The economic
evidence also indicates that consumers begin their search for a hotel room on a search engine
(such as Google), or a price comparison website such as TripAdvisor. MMT-Go's own look to book
ratio is only 10% i.e., only 1 out of 10 visits on the MMT-Go platform results in an actual booking.
89. The DG's market share estimates are incorrect : Firstly, Booking.com's room nights for FY
2018-2019 are shown to have declined considerably, whereas the turnover records a 15 %
increase. Secondly, the DG has not included room nights sold through OYO, FabHotels and
Treebo, although they also operate in the online hotel booking market and act as intermediaries
for their franchised hotels. Thirdly, the DG does not include GoIbibo's room nights sold for the FY
2016-2017 in the overall market, which leads to
the
90.
91. It was further stated that MMT-Go's competitors (even in OTA segment) exceed MMT-Go in
terms of size, importance and resources. DG Report itself notes that Booking.com-Agoda and
Expedia's turnovers are much bigger than MMT-Go's turnover which goes against the DG's finding
about MMT-Go's dominance. It was further stated that the DG record also reveals that
Booking.com International (based out of Netherlands) and Expedia Inc. (based out of United
States of America) directly provide online travel agent services in India. Their Indian subsidiaries
merely provide “support services” and do not provide OTA services in India. Therefore,
Booking.com International and Expedia Inc., which are much larger than MMT-Go in terms of
revenues, financial strength, and workforce, are MMT-Go's competitors in the narrow OTA
segment for the purposes of Section 19(4)(c) of the Act.
92. It was further stated that there is no consumer dependence on the MMT-Go platform as
neither hotels nor consumers are dependent on MMT-Go. There are sufficient alternatives in the
market; consumers can easily shift between the alternatives in the market; OTA is merely one of
the several channels for distribution/booking of hotels/accommodation; and economic
performance of Treebo and FabHotels post-delisting demonstrates that they were not dependent
on the MMT-Go platform. Moreover, OYO registered exponential growth, which is completely
independent of the MMT-Go platform. The DG has put leading questions to the hotel respondents
to conclude consumer dependence, which is impermissible under law.
93. MMT-Go further stated that contrary to what the DG has recorded, OYO and MMT-Go are
not vertically integrated. Contractual links between independent enterprises, not having an “unity
of interest” in the market cannot constitute “vertical integration” in terms of the Act. The listing
agreement does not confer MMT-Go with control over the allocation of OYO's inventory, price of
such inventory, or the discounts provided on such inventory. Moreover, OYO itself is listed on
multiple channels, including on multiple OTAs.
94. MMT-Go also criticised the DG's entry barrier analysis stating that the DG's finding ignores
the entry of new players, and the exponential growth of existing players in the OTA market.
Recently, even e-commerce platforms such as Amazon and Flipkart (through acquisition of
Cleartrip) have entered the OTA market. Publicly available information also indicates that Google
plans to enter the OTA market and compete directly with OTAs.
95. It was further contended that chain and independent hotels exercise countervailing buyer
power. It was submitted that the DG incorrectly considered MMT-Go as a “buyer” for the
“countervailing buyer power” analysis. Hotels are not “dependent” on MMT-Go to generate hotel
bookings. The Kadence Survey, which targeted only hotels that use OTAs, indicated that only
33% of their bookings were made through OTAs, out of which MMT-Go's share is even lower.
FabHotels, Treebo and OYO are well funded and exercise strong countervailing buying power.
96. As regards the Parity Obligations, MMT-Go submitted that these are a standard industry
practice in the OTA market and since such commercial clauses are commonly used by all market
participants, it would not contravene Section 4(2)(a)(i) of the Act, in terms of the Hon'ble Delhi
High Court's decision in Saurabh Tripathi v. Great Eastern Energy Corporation Ltd. It was stated
that none of the respondents of the DG's hotel survey claimed that MMT-Go has “imposed” the
parity obligation. In fact, even the Informants never objected or indicated any concern with the
parity obligation with MMT-Go at the time of entering into the agreement in 2017. The allegation
that MMT-Go had imposed the parity obligations were made for the first time before the
-----------------------------------------------------------------------------------------------------------------------------------------------------------
Commission as an afterthought only in 2020. The DG's investigation also reveals that hotels
themselves insist on parity clauses. Hence, it cannot amount to an unfair “imposition” by MMT-
Go. MMT-Go argued that the DG exclusively relied on foreign jurisprudence to hold that wide
parity clauses are anticompetitive in India which is legally unsustainable.
97. Further, the DG's conclusion of implementation of the parity obligation is stated to be
unsupported by evidence on record. It is stated that due to the dynamic pricing strategy
employed by hotels, it is virtually impossible to monitor or enforce the parity obligations. The DG
was unable to find any evidence of “monitoring” or “enforcement” of the parity obligations and
instead relies on two instances (that too provided by FabHotels)
where A single
instance of MMT-Go requesting the hotel partner to rectify rate disparity cannot be construed as
evidence of any systemic monitoring, enforcement, or imposition of the parity obligation by it.
MMT-Go has never imposed or enforced the parity obligations by way of levy of any monetary
penalty on the hotel partners, termination of the listing agreement, or suspension of the
hotels/accommodation from its platform.
98. Further, the DG's finding that parity obligations resulted in entry barriers is
unsubstantiated. MMT-Go further submitted that parity obligations are necessary and objectively
justified given market conditions in India. Parity obligations are necessary in India due to the
price sensitivity of the Indian consumer and to prevent freeriding since unlike in a mature
market, in a nascent market such as India. Also, MMT-Go had to undertake significant
promotional and marketing expenses to encourage consumers to book online. Lastly, it was
argued that regulatory intervention aimed only at MMT-Go would not address the competition
concerns in the market.
99. As regards the finding of the DG on predatory pricing, MMT-Go has submitted that certain
cost items which the DG treats as variable are considered as fixed in nature by MMT-Go, either
because they are not incurred at the transaction level or are investments made by the company
to acquire customers. These include, for example, expenses for customer loyalty program, and
other platform marketing and administrative expenses. Further, there are certain cost items
under ‘other direct cost’ which should not be apportioned between the hotels and packages
businesses but the DG has apportioned it. For example, certain ‘advertising and business
promotion expenses’ accrue entirely to the hotel business, while certain ‘direct costs’ accrue only
to the packages business. MMT-Go vide submission dated 29.07.2022 have objected to the DG's
calculation of average variable cost and has stated that DG's treatment of cost is not appropriate
and has submitted updated calculations through its own estimation of cost by reclassifying
certain costs as variable that has been taken as fixed by DG with assumptions and explanations
based on financial statements, and trial balances submitted to the DG by MMT-Go. Basis this,
MMT-Go has submitted that the its contribution margins were positive from FY2018 to FY2020.
100. MMT has objected the DG's cost treatment, and has summarised the DG's treatment and
MMT-Go's view of cost heads as follows:
Table B-1 : DG's and MMT-Go's view of its own cost items
-----------------------------------------------------------------------------------------------------------------------------------------------------------
[Source : MMT reply dated 29.07.2022 : Response to Investigation Report of DG]

101. As regards the exclusivity clauses, MMT-Go submitted that
the
102. MMT-Go further submitted
that
MMT-Go also relied upon the European Court of Justice's decision in Intel Corp Inc. v. European
Commission, wherein it was held that exclusive arrangements are considered abusive only if
forecloses equally efficient competitors and does not have an objective justification. MMT-Go also
tried to justify the exclusivity clauses stating that they are required to incentivise MMT-Go to
undertake additional promotional activities on behalf of the chain hotels, and to increase
efficiencies.
103. As regards the denial of market access allegation, MMT-Go submitted that under
competition law, a duty to deal (even in case of dominant enterprises) can only be imposed in
exceptional circumstances because freedom of contract (including freedom to choose business
partners) is fundamental. The exceptional circumstances are : (i) the refusal relates to a product
or service that is objectively necessary to be able to compete effectively in the downstream
market; (ii) the refusal is likely to lead to the elimination of effective competition in the
downstream market; and (iii) the refusal is likely to lead to consumer harm. It was argued that
these circumstances do not exist in the present case. MMT-Go does not provide any unique
facility that is not provided by alternate hotel booking channels. Apart from direct online
channels, such as their own websites, apps etc., hotels/chains distribute their inventories through
several third-party distribution channels, namely, OTAs, Metasearch (Trivago Tripadvisor etc.),
general search engine (Google), and super apps such as Just Dial, Sulekha, etc. Even in the OTA
segment itself, MMT-Go's platform is just one amongst the 20 odd OTAs operating in the market.
The refusal has not resulted in any elimination of competition as the delisting of FabHotels and
Treebo did not lead to any adverse long-term effect on their market performance. Rather, any
effect on the market performance was temporary. MMT-Go also sought to objectively justify the
delisting stating that MMT-Go had no incentive to delist FabHotels and Treebo from its platform.
Such delisting was pursuant to a condition imposed by OYO and since OYO was an indispensable
partner, it was commercially expedient for MMT-Go to forge a commercial relationship with OYO.
104. It was further submitted that though the exclusivity clause and the delisting obligation
under the OYO Agreement was examined by the DG under Section 3(4) of the Act, the DG has
viewed the exclusivity as a per se violation, which is inconsistent with the statutory framework.
105. It is submitted that there are Further,
no entry barriers were created in the upstream franchising market as the delisting obligation only
applies to MMT-Go also claimed that the Agreement had
net consumer benefit as, absent the OYO Agreement, OYO's inventory would be absent from MMT
-Go's platform. The customer traction received by MMT-Go platform because of the OYO
inventory, ultimately lent better visibility to the independent hotels listed on the MMT-Go
platforms. The delisting event also resulted in FabHotels and Treebo developing its own
distribution channel.
106. Besides the aforesaid, MMT-Go, in its post-hearing submission, also submitted brief
responses to some of the queries raised by the Commission during the hearing. Responding to
-----------------------------------------------------------------------------------------------------------------------------------------------------------
the Commission's query on non-substitutability of online and offline mode of booking at the level
of end-consumers, MMT-Go-stated that it operates as a platform which provides two distinct
services to two distinct sets of users and the DG failed to conduct a survey to understand the
extent of demand-side substitutability on the consumer-side of the platform. As regards
Commission's observation on alleged dependence of budget hotels on OTAs, MMT-Go submitted
that market reports suggest that 92% of the hotels in India fall within the unorganised segment
of the overall market for hotels rooms, and this unorganised sector generates only 11% of its
bookings through online channels. Thus, the market of hotel booking in India is predominantly
offline, particularly budge hotels and they do not depend upon OTAs for visibility or survival. It
was further stated that the lesser known or budget hotels can easily avail services of price
comparison websites, meta search engines etc. for expanding their reach. Further, they can set
up their own websites with the option of booking, which entails a cost as low as INR 1500.
107. As regards Commission's query on discounts, MMT-Go submitted that discounts on hotel
booking is not a unique feature on MMT-Go portal. All OTAs, Franchise Chains, Hotels were and
continue to offer discounts on hotel bookings. In fact, hotels prefer to offer more discounts on
their direct channels as they do not have to pay any commissions for such bookings.
108. MMT-Go also stated that the hotel partners can exercise the Do Not Discount (“DND”)
option if they do not wish MMT-Go to offer discounts and MMT-Go implement the DND requests
on the same or next day.
109. As regards, Commission's query on misrepresentation (Hotels being shown sold out may
be an issue if it happens for a long period of time), MMT-Go stated that till date more than 2000
hotels have delisted themselves from the MMT-Go platforms and only two hotel chains have
raised this issue. This demonstrates that MMT-Go promptly delists properties when requested and
does not display ‘sold out’ for prolonged period. It was also stated that MMT-Go has no incentive
to indulge into any such practice since if a property is shown to be unavailable on the MMT-Go
platforms on a given date; but is available for booking on a competing distribution channel, it
would adversely affect the customers' perception of the selection of properties available on the
MMT-Go platforms. It was further stated that the issue was faced on GoIbibo only due to a
technical difficulty arising out of the manual Search Engine Optimization (“SEO”) process
followed by GoIbibo till December 2020. Since MMT and GoIbibo are under the same
management, had there been an intent to misrepresent, the same information would have been
displayed on MMT portals as well.
110. Lastly, MMT-Go argued that in case the Commission returns a finding of contravention
against it, its submissions on penalty may also be considered. MMT-Go submitted that its
relevant turnover for the purposes of the present case would be the commission charged by Go-
MMT for rendering online hotel booking services to hotels during the period 2017 to 2020.
Additionally, MMT-Go urged that the Commission should give due regard to the mitigating
circumstances which exists in favor of MMT-Go while calculating penalty. Even before the
Commission has rendered its decision, MMT-Go has already voluntarily addressed the
allegations : (a) parity obligation has not been imposed and no coercive action has been ever
undertaken; (b) FabHotels and Treebo Hotels are already listed and they can continue to list after
entering into new agreements; (c) ‘Sold Out’ issue arose because of technical issue and same has
been addressed through automation; (d) ‘D Minus’ exclusivity is only with chain hotels and none
of the independent hotels were subjected to it; (e) DG itself has not found any violation in
respect of the commission and Service fees levied by the DG; (f) the commission and service fees
have fallen over the years. It was further submitted that MMT's business and operation has been
affected by the Covid-19 pandemic; in the first quarter (April-June) of FY21, MMT's year-on-year
revenue slumped by 95.5 percent. In the next quarter revenues slumped 82.2 percent year on
year. The industry has just started recovering post Covid. Furthermore, MMT-Go stated that
because of the MMT/Ibibo combination order, MMT-Go was acting under a bonafide belief that it
was acting in compliance of Section 4 of the Act at the time of executing the contracts with the
Informants in 2017. It was also stated that there is no allegation or even a whisper against MMT-
Go having any supply side leaning or allegation of self-preferencing which has been the subject
matter of the Commission's investigation against almost all of the platform companies. Lastly, it
was submitted that MMT is an Indian company competing against large global conglomerates and
any finding of dominance against MMT may have a chilling effect on MMT's ability to compete
with large global entrenched players.
OYO
-----------------------------------------------------------------------------------------------------------------------------------------------------------
111. At the outset, OYO denied all the allegations raised by the Informants. OYO stated that
the main allegation of the Informants against it is with regard to the commercial agreements
which OYO had with MMT-Go, pursuant to which allegedly FabHotels and Treebo were driven out
of the market. OYO refuted the said claim stating that MMT-Go is not essential for hotels in any
market in India and thus the contention of FabHotels and Treebo that MMT-Go is essential for
their survival is not made out. It was argued that majority hotel bookings are still offline. OYO
submitted that of its revenue generation in relation to hotel room bookings in
India is from offline distribution channels. It was also stated that out of all the hotels that
partnered with OYO, did not have any online presence before they partnered
with OYO. Further, even the hotels queried by the Hon'ble DG have disclosed a high offline
presence.
112. Specifically, with respect to the FabHotels and Treebo's allegations and the
corresponding findings of the DG, OYO submitted that neither FabHotels nor Treebo have
produced any evidence to prove that they were “driven out of the market” as a result of the
delisting. Rather, the data on record demonstrates that Treebo and FabHotels were hardly
impacted by the delisting. Further, the data relied upon by the DG shows a consistent increase in
FabHotels' number of live properties post delisting, except in January 2020 that can be mainly on
account of the covid-19 pandemic. Also, there had been no impact on FabHotel's revenue which
initially peaked in , and already started decreasing in (when
FabHotels was still listed on MMT-Go). Further, any impact of delisting was immediately
recovered by , and then increased to a new high . It then
decreased only due to pandemic. OYO further stated that while making an observation regarding
substantial decline in FabHotels room nights' bookings post desilting, the DG wrongly took into
account only the booking received through OTAs.
113. OYO has also refuted FabHotels' claim that it was an effective competitor of OYO and that
its growth was significantly impaired because of MMT-Go's discriminatory conduct which
foreclosed competition. OYO stated that the comparison drawn by FabHotels is misleading
because during all three years FYs 2016, 2017 and 2017, FabHotels' properties were listed on
MMT-Go's platforms, while OYO's hotel partners were delisted. Thus, any comparison would be
misleading. Further, it is stated that the data for FYs 2016, 2017, and 2018 shows that OYO
could grow and flourish even when it was not listed on MMT-Go, having invested in its own
platform and innovated in the market, while the inefficient FabHotels could not effectively
compete, even when it was listed on MMT-Go. Further, it has been submitted that regardless of
whether OYO's hotel partners were listed on MMT-Go's portals or not, its revenue from online
bookings continued to be between with MMT-Go making minimal/no difference
to the percentage of its revenue from online channels. And out of the total revenue from online
booking, of online sales are from OYO's own app (including walk-ins). Further,
OYO has submitted that MMT-Go's relationship with OYO is also not significant, given that it
contributes only of OYO's total revenues and room nights and OYO's share of
MMT's revenues is only .
114. Refuting Treebo's claim, OYO has submitted that delisting from MMT-Go did not have any
impact on Treebo's bookings given that it has always been significantly dependent on offline
bookings. It has been submitted that Treebo's revenue initially increased to INR 4.9 Crore in May
2018, from INR 4.6 Crore in April 2018 (i.e., at the time of delisting) and then marginally
decreased till it was INR 3.8 Crore in October 2018. Accordingly, any alleged impact of delisting
was, by Treebo's own data, recovered entirely within 3 months of delisting and new heights were
reached as early as August 2018. The recovery continued with Treebo recording an increased
revenue of INR 6.1 Crore in December 2019. Treebo's revenues continued to climb absent being
listed on MMT-Go's platform and any later reduction in revenue was on account of the Covid-19
pandemic and not anti-competitive conduct. It is also submitted that there was no impact of
delisting on Treebo's network of properties. The data/graph relied on by the DG demonstrates
that post its delisting in June 2018, Treebo's properties reduced to 339 in August 2018 (the
lowest). However, it quickly reached 364 properties by October 2018. Thereafter, it hit 466
properties in September 2019, leading to an upward trend, with 613 properties in February 2020.
It was only with the advent of the COVID-19 pandemic, that Treebo saw a downward trend.
However, it had 511 properties by August 2020, i.e., more than its total properties prior to the
delisting (in June 2018). Further, claims related to decline in Superhero properties was also
refuted stating that Treebo's Superhero properties increased from 50 in August 2019 to 433 in
-----------------------------------------------------------------------------------------------------------------------------------------------------------
January 2020 (i.e., even after its delisting which happened in June 2018). It is lastly submitted
that Treebo has been attracting significant investments which shows that it is still an attractive
investment option.
115. OYO countered FHRAI's submissions regarding it being a Franchisee service provider and
DG's conclusion on the same. It stated that DG's conclusions are devoid of any factual basis, and
in fact are in complete disregard to the evidence gathered by it, during the investigation.
FHRAI
116. The main thrust of FHRAI's submission was that both MMT-Go and OYO are strong
players and their inter-se exclusive arrangement is furthering their strength to the exclusion of
other players in the markets in other segments.
117. It was argued that OYO held a dominant position in the market which the DG has failed
to look into. DG ought to have appreciated that OYO has a significant market power in the vertical
chain, due to the dominant position of the MMT-Go. The exclusionary and mutually beneficial
agreement between OYO and MMT-Go empowers OYO to have a control and dominance over the
market as compared to other franchising service providers. It was submitted that the DG failed to
consider that due to the exclusive arrangement between MMT-Go and OYO, it is difficult for any
other OTA to get sufficient traction to be able to become an effective competitor of MMT-Go.
118. It was further submitted that MMT-Go's agreement with OYO discriminates in terms of
the access granted to other competitors in the respective market segments of MMT-Go and OYO.
This further suppresses the ability of other OTAs as well as franchise service providers to grow.
The same has also been acknowledged by the DG in its report where the DG has held that the
agreement between OYO and MMT denies access to other players in the market.
119. OYO's massive presence on the biggest OTA platform in Indiaputs OYO in a position to
abuse the small standalone hotels. Due to the aforesaid agreement, any future entrants not
planning to list on MMT-Go, will not be able to compete with OYO given its exclusivity under this
agreement. Moreover, vertical integration between MMT-Go and OYO has been able to create
entry barriers in the market and thus shows, that OYO is also a dominant player in the market.
120. DG had failed to consider that OYO does not allow the Hotels to exit the platform or delist
themselves as OYO Rooms, moreover hotels are disabled to operate on their own as they are
continued to be shown on the platform as ‘sold out’ on all OTAs by OYO.
121. FHRAI further submitted that OYO has admitted that hotels are required to put up OYO
brand on their properties. OYO enters into a Marketing and Consulting Agreement (MCA) with the
hotels, which sets out the terms on which its hotel partners will operate. OYO also enters into
lease agreement with these hotel partners. Pursuant to the MCA, OYO provides innovative
technology enabled solutions which facilitates the hotel partners to better/efficiently manage
their properties. OYO also lends them the ‘OYO’ mask. In addition to the above, OYO offers
multiple VAS (all opt-in) for the benefit of its hotel partners. In return, OYO charges a portion of
revenue from these hotel operators as a service fee.
122. FHRAI submitted that the investigation with respect to OYO stands premature and the
Commission should refer the matter back to the DG under Section 26(7) of the Act for re-
investigation on the issue of dominance of OYO in the relevant market.
123. As regards the observations and findings of the DG with regard to excessive and unfair
commissions, it was submitted that though the DG found MMT-Go to be dominant player and
observed that MMT-Go had charged the highest bracket of commissions, i.e. 30% or more, to the
highest number of room nights from 2015-2016 to 2019-2020, the DG has incorrectly held that
the commissions charged by it is not high and is commensurate with the industry practice.
124. It is submitted that the DG also failed to take into consideration the data submitted by
Treebo which evidences the exorbitant commissions charged by MMT-Go exceeding 30% in
October-December 2016. The DG further failed to consider the data submitted by several private
hotels which clearly shows that MMT-Go was charging the highest commissions across its
competitors, amounting to 28% in certain periods, apart from their additional charges through
other schemes.
125. It was further argued that in view of the dominant position held by MMT-Go, it is an
obligation on MMT-Go to discharge a ‘special responsibility’ to not abuse its position and ensure
fairness towards its competitors.
126. FHRAI also stated that the conclusions drawn by the DG are inconsistent as on the one
hand, the DG has observed that there does not seem to be any scope for negotiations between
-----------------------------------------------------------------------------------------------------------------------------------------------------------
MMT-Go and hotels but on the other hand the DG has wrongly held that the terms of Performance
Linked Bonus (PLB) schemes were mutually agreed.
127. FHRAI also submitted that though its competitors like Expedia might be running similar
schemes like the PLB/VDI, the percentages charged by MMT-Go to the hotels are far in excess as
compared to its competitors and are thus, violating the provisions of the Act.
128. As regards the Hotel Service Fees, FHRAI submitted that the DG has erred in observing
that the impact of service fee imposed by MMT-Go on the competition between hotels could not
be ascertained and thus, the DG's conclusion that the imposition of service fee charged to
customers does not attract the provisions of the Act cannot be accepted. It was submitted that
the DG has also failed to consider the submission of hotels which clearly reveal that though the
Hotel Service Fee was taken under the name of the hotel, the same was not passed on to them.
129. FHRAI also claimed that the DG failed to consider that there is meeting of mind between
MMT-Go and OYO with respect to charging exorbitant commission from the hotels on its platform.
It is pertinent to note that the rate of the commissions levied by MMT-Go and OYO on the hotels
are similar which ranges from 40-45% and thus it can be safely concluded that there is an overt
act on two different levels which has led to an appreciable adverse impact to the competition in
the relevant market. It was further submitted that MMT-Go and OYO are working in alignment
with each other and are converting open competitive market of providing hotel rooms into
monopolistic market. MMT-Go entered into agreements with OYO in 2018, and within a year OYO
had 15,569 properties (in 2019). The vertical arrangement between MMT-Go and OYO resulted in
influx in a large number of customers, which also means large number of hotels willing to list
hotels on MMT-Go. Such vertical integration has further strengthened the position of MMT-Go in
the market.
FabHotels/Casa2 Stays Pvt. Ltd.
130. FabHotels endorsed the findings of the DG as regards relevant market, dominance and
abuse o dominant position by MMT-Go. It was stated that FabHotels operates in the market for
franchising budget hotels in India where it competes with Treebo and OYO and releies heavily on
the services of MMT-Go which is an OTA. It was further stated that online bookings cannot be
considered substitutes of offline bookings. Yatra and EaseMyTrip in their responses to the DG
have supported such assertion. OTAs provide bundled SCB services unlike direct websites and
specialised portals. The statement of Mr. Rajesh Magow during 2022 Earnings Call, CEO of
MakeMyTrip and MMT-Go's contractual obligations with FabHotels and OYO also indicate OTAs
form a distinct relevant product market from the perspective of end-consumers and budget hotel
franchisors.
131. FabHotels relied upon order dated 20.08.2019 in C-2019/05/664, involving acquisition
by Ctrip of additional 42.52% (approx.) outstanding voting securities of MakeMyTrip Limited
(MMT/Target) from MIH Internet Sea Private Limited to argue that OTAs constitute a distinct
market. It further relied upon the DG Comp's decision in Case No. M.9005, involving acquisition
by Booking Holdings Inc. USA., of sole control over HotelsCombined Pty Ltd, Australia, to submit
that OTAs form a distinct relevant market. Transition from MSS to direct websites is not seamless
since they do not offer booking functionality and provide lower choice than OTAs. Other
distribution channels also cannot be considered substitutes for various factors such as direct
websites do not offer compare function; budget hotels do not have direct websites to offer real-
time booking; retail consumers/end-consumers cannot access corporate booking channel of
OTAs; retail consumers/end-consumers cannot access MICE channels; packaged holidays are not
substitutes of hotels booking services offered by OTAs; demand for alternate accommodation is
distinct from the demand for hotels by end-consumers/retail consumers due to OTAs operating
separate verticals for home stays and alternate accommodation; end-consumers and budget
hotels cannot access the Global Distribution System and social media websites and apps do not
offer compare and book functions. Further, MMT-Go has not placed on record any demonstrable
evidence to support its assertion that end-consumers consider alternate accommodation to be
substitutable with hotels.
132. FabHotels also raised several objections with regard to the Kadence Survey and the MMT-
Go Economist Report. FabHotels also relied upon an economist report, i.e. Saatvic Report, which
highlighted allegedly wrong inferences and conclusions drawn in MMT-Go Economist Report. It
was submitted that the MMT-Go Economist Report ought to have considered the market for online
intermediation services for booking budget hotels as the narrowest candidate market. MMT-Go
Economist Report does not state the percentage of respondents who were sampled using
-----------------------------------------------------------------------------------------------------------------------------------------------------------
snowball technique. In sum and substance, FabHotels stated that the MMT-Go Economist Report
is not reflective of end-consumers' behaviour between 2017-2021, answers suffered from
response bias rendering them unreliable and inaccurate. Saatvic Report has explained how
Kadence hotel survey actually indicates complementarity. FabHotels also stated that though
internet penetration is lower in India than Germany yet proportion of online booking is nearly at
par with Germany.
133. Bookings for peak seasons are planned bookings/planned travel that take place much in
advance. Similarly, allocation of inventory on OTAs during weekends will be lower than weekdays
given that planned bookings/planned travel are generally during weekends and holidays. Further,
if inventory is booking through MICE or corporate booking channels, the inventory will not be
available for OTAs. Significant portion of last-minute bookings take place through OTAs and MMT-
Go imposed exclusivity conditions on FabHotels, Treebo, OYO and several hotels during that
period only to reap commercial gains.
134. As regards dominance of MMT-Go, it was submitted that its market share as per the MMT
-Go Economist report in the online hotel booking market over the 2017-2019 period is stated to
be using a top-down approach and using a bottom-up approach.
However, in MMT's investor presentation for May 2019, it is stated that MMT-Go's market share in
‘domestic online hotel’ market was 63% in 2017.
135. FabHotels stated that the correct metric to determine dominance of MMT-Go is stayed
room nights which reflects actual fulfilment of the SCB services. MMT-Go's stayed room nights
are significantly higher than its competitors. MMT-Go in its reply to the DG accepted that
booking.com and Expedia were not significant competitors during 2017-2020. Further, MMT-Go's
marketing and promotion expenses are also significantly higher than other OTAs aligned with its
size, resources and economic advantage over other OTAs.
136. FabHotels further submitted that MMT-Go imposed wide MFN obligations (MFNs) on
FabHotels which were in the form of rate and room parity clauses. [ ]
FabHotels stated that ‘best efforts’ standard as used in the is the most
aggressive and stringent of all standards of performance which ensures that parties do not
inadvertently act in breach of agreements. FabHotels was required to take all reasonable steps
available to ensure the parity of rooms and rates offered to MMT-Go which enforced through
constant communication with FabHotels' representatives during the period of the said
agreements. Non-compliance affected ranking of hotel properties as corroborated by the
submission of Hotel Lalit, Chandigarh before the DG. These MFN obligations prejudicially affected
FabHotels, other OTAs and end-consumers.
137. Thus, imposition of MFN obligations contravened
Sections 4(2)(a) and 4(2)(d) of the Act.
138. MMT-Go restricted FabHotels from offering its properties for bookings on any OTAs other
than MMT-Go . The last minute bookings form a significant part of hotel
bookings through OTAs. MMT-Go Economist Report relies on Hotelivate Report and states that
around two-third of OTAs users claim to start searching for a hotel not before 15 days from check
-in. The imposition of such exclusivity obligation on hotels/chains has harmed competitors and
end-consumers. Competing OTAs namely booking.com and PayTM have stated that this has had a
severe detrimental effect resulting in loss of business. Thus, the imposition of exclusivity
obligations by MMT-Go contravened Section 3(4)(d), Section 4(2)(a) and Section 4(2)(c) of the
Act.
139. FabHotels stated that MMT-Go discriminated between similarly placed players by
arbitrarily delisting FabHotels from MMT-Go portals. It assumes importance when MMT-Go is an
essential partner for FabHotels. Post-delisting, FabHotels shifted its focus to B2B business since
there was a significant drop in revenue and drastic rise in expenses in B2C model. While there
was increase in inventory on account of increased focus on B2B business, stayed room nights of
FabHotels through B2C channel remained low.
140. FabHotels has stated that MMT-Go is a dominant player in the market for hotel bookings
through OTAs in India and functions as “the gateway” for online services to “search, compare and
book” hotel rooms. Existing market participants in the market for franchising budget hotels in
India cannot compete effectively without having access to MMT-Go Portals. FabHotels has also
submitted that dependence of players engaged in hotel franchising business can be seen from
the growth that OYO experienced after its properties got listed on MMT-Go portals. Further, the
preferential treatment extended to OYO by MMT-Go has foreclosed competition in the market as
-----------------------------------------------------------------------------------------------------------------------------------------------------------
FabHotels and other similarly placed players do not have access to portals of the largest OTA in
the country. There has also not been any new entry in the market for franchising services for
budget hotels in India in the last two-three years. Eventually, existing competitors would also be
forced to exit the market for franchising services for budget hotels in India.
141. FabHotels further submitted that they suffered exceptional circumstances resulting from
limitations posed by the Covid-19 pandemic which has badly affected the hotel
industry.
142. FabHotels stated that preferential treatment was given to OYO and OYO's competitors
were excluded from MMT-Go portals which restricted the choice of hotels to OYO. The delisting
was without any objective justification. OYO has stated that the exclusion of FabHotels was
negotiated to ensure better visibility for OYO's hotel partners on MMT-Go portals. It further stated
that MMT-Go acts as a gatekeeper and has a special responsibility to act fair and responsibly in
the market. The market access was denied by a dominant online intermediation which was lethal
to the functioning of businesses which rely on such intermediaries to reach end-consumers. Thus,
arbitrary delisting of FabHotels by MMT-Go contravened Section 4(2)(a) and Section 4(2)(c) of
the Act till September 2021.
143. FabHotels further stated that even though MMT-Go has relisted it pursuant to the orders
of the Commission, there is material on record which demonstrates that FabHotels was not given
constructive and effective relisting by MMT-Go. For example, in February 2018 (before delisting)
FabHotels' stayed nights booked on MMT-Go was times FabHotels' stayed nights
booked on other OTAs. However, in February 2022 (after re-listing) FabHotels' stayed nights
booked on MMT-Go was only times FabHotels' stayed nights booked on other OTAs.
Further, FabHotels' re-listing has also not been on fair and non-discriminatory terms in view of
the lack of visibility of FabHotels' properties and high commissions charged by MMT-Go.
144. Further, FabHotels also filed an application dated 26.08.2022 objecting to the revenue
data furnished by MMT-Go stating that such data only includes the revenue earned by
MakeMyTrip (India) Private Limited and Ibibo Group Private Limited from online intermediation
service for booking domestic hotels and alternate accommodations in India; and that it does not
include the revenue of the overall MakeMyTrip Limited which is listed on the NASDAQ and of
which the former two entities are the wholly owned subsidiaries. It is thus, prayed, the overall
MakeMyTrip Limited's revenue data be considered for the imposition of penalty.
Treebo/Ruptub Solutions Pvt. Ltd.
145. Treebo made similar submissions as offered by FabHotels with regard to relevant market
and dominance of MMT-Go in the said market. Treebo agreed with the delineation of relevant
market by DG for MMT-Go since its intermediation services concern two different but
interdependent consumers i.e. end-consumers and hotels on the basis of end-use of the service,
price, consumer preference. The European precedents such as German HRS case and
Booking.com case are applicable in the Indian context as well since, as noted by DG as well,
internet penetration in India has reached 50% in 2020 due to pandemic to indicate increased
reliance of both hotels and consumers on OTA. There is no substitutability between online and
offline as general consumer behaviour shows that customers do not switch from online to offline.
Treebo denied the assertion of the MMT-Go that any of the channels such as Hotel's own
websites, corporate customers, offline channels, MSS, GDS are substitutes since one or the other
misses out from comprehensive SCB bundle (Search, Compare and Book). MMT-Go is not used
just for browsing over the prices. Even the data relied upon by MMT-Go in its reply, both from
hotel's perspective and end-consumer's perspective, OTAs have been given the preference. The
fact that OTAs are considered as an essential trading partner from the hotel's perspective is
confirmed by the data presented by MMT-Go.
146. As regards OYO, it was submitted that OYO operates in the market for franchising
services for budget hotels, as noted by the Commission in Case No. 03 of 2019 In Re : RKG
Hospitalities Pvt. Ltd. and Oravel Stays Pvt. Ltd. as well which has been admitted by OYO in their
written submissions as well. The DG has correctly assessed the market. MMT-Go as well as the
expert have also categorically referred OYO as franchise chain.
147. As a preliminary submission, Treebo stated that there is an agreement entered into by a
dominant player, in this case, MMT-Go to oust two competitors of OYO, (who is in the vertical
relationship with MMT leads to denial of market access and no express requirement is needed for
an analysis of Section 19(3) of the Act.
148. MMT-Go has incorrectly argued that it is not the largest player by using the alleged
-----------------------------------------------------------------------------------------------------------------------------------------------------------
higher inventory of Yatra.com and global funds of Booking.com and Expedia, which is based on
misleading figures.
149. Treebo has relied upon Table 15 of DG Report to buttress its averment. Treebo stated
that Yatra's market presence is comparatively insignificant compared to MMT-Go despite having
larger inventory. Even booking.com is an insignificant player as compared to that of MMT-Go.
Despite having low inventory, MMT-Go secures more bookings. The fact that OTAs with such big
inventories and global resources have not been able to effectively penetrate the market, is itself
evidence that MMT-Go had blocked growth of these platforms by imposing restrictions through its
agreements with the hotels such as D minus 3 and D minus 30 clause, price parity clauses etc.
For instance, OYO would not list on Paytm and Booking.com and other OTAs for last 5 days before
check-in.
150. During the course of the arguments, MMT-Go relied on a newspaper report of 2018 which
shows that booking.com is looking to expand aggressively in the Indian market through
discounts etc. However, booking.com has not been able to make much dent into MMT-Go's
dominant position which has only increased from 63% (as per MMT's own investor presentation)
to 72% (as per the DG Report). The strength of MMT-Go is supported by the documents such as
Red herring prospectuses filed by its competitors.
151. MMT-Go reaps the benefits of network effects, vertical integration and restrictions
through its ‘D minus 3’ and ‘D minus 30’ imposed on FabHotels and Treebo and condition on OYO
for exclusion of Paytm and booking.com. There is presence of barriers to entry at multiple levels
on MMT-Go's competitors and OYO's competitors in the downstream market. Despite imposing
the highest commission rate, MMT-GO is the dominant player in the market.
152. Vertical integration between MMT-Go and OYO which led to exclusion of FabHotels and
Treebo from the MMT-Go's platform also resulted in reducing the bargaining power of chain hotels
as well as independent hotels. Despite the increase in commission/other charges, hotels stick to
MMT-Go as it is an essential distribution channel. Therefore, there is limited countervailing buyer
power.
153. As regards the MMT-Go and OYO's commercial arrangement, it was submitted that OYO
holds market share of 89% and MMT-Go is a dominant player, and thus, their arrangement is
bound to adversely impact the competition.
154. As regards, impact of delisting, it was submitted that due to delisting, 57.12% OTA
bookings on MMT-Go were immediately lost. Treebo's superhero properties on MMT-Go declined to
nil and the scheme got completely derailed. Treebo submitted that the independent hotels were
actively delisted by MMT-Go as result of which they ended their partnership with Treebo.
155. Treebo stated that due to delisting of FabHotels and Treebo, independent hotels,
considering loss of access to dominant OTA platform and intending to avail franchisee were left
with no option but to necessarily engage with OYO. The exclusion of Treebo was a case of denial
of market access by MMT-Go under Section 4(2)(c) of the Act.
156. Treebo submitted that the allocation of OYO inventory to MMT was 30% which was
subsequently increased to 40% post 2018 and the agreement was valid for 5 years.
157. It is evident from the submissions of OYO and MMT-Go that MMT-Go was forced by OYO
to delist Treebo. There was no justification for delisting Treebo from the platform except for
eliminating a potential competitor. Treebo submitted that OYO switched to a full franchisee model
in early 2018 and the said delisting was done to eliminate the other effective competitors of OYO.
158. Treebo submitted that DG Report clearly establishes the harm caused to Treebo and
FabHotels in the downstream market; and to competing OTAs such as Booking.com and Paytm,
which could not effectively penetrate the market. It is inconsequential that Treebo survived the
market since it is not sufficient to conclude that there was no denial of market access. It was
further stated that the delisting of Treebo from MMT-Go platform was not on account of any fault
of Treebo but solely attributable to the agreement between MMT-Go and OYO. Treebo
distinguished the Commission's cases relied upon by MMT-Go, namely Muralya case and Asian
Paint case, and stated that these cases have no application to the present case.
159. Treebo submitted about the negative effects of D minus clauses by highlighting the
submissions made by Booking.com and Paytm before the DG, on account of which OYO rooms
were unavailable for booking on these platforms. Treebo further submitted that D minus clause is
not about inventory allocation but inventory blocking. The DG made effects-based analysis of D
minus clauses. The OTAs such as booking.com and Paytm pointed out the detrimental effect of
-----------------------------------------------------------------------------------------------------------------------------------------------------------
the restrictions faced.

160. Treebo submitted that agreement between OYO and MMT-Go was anticompetitive under
Section 3(4) of the Act having cause AAEC such as Treebo faced loss of 52% loss of its business;
number of Treebo live properties got reduced; Treebo's superhero properties declined to nil and
growth of Treebo has been more than 100% since relisting in August 2021 as it grew from 372
hotels to 731 hotels. MMT-Go recorded highest number of room nights which shows the effect of
such clauses since most of the booking is done in the last minute and consequently, reliance on
OTA increases. On the other hand, Treebo has no exclusivity agreements with any other OTA
except with MMT at the time when it was listed on MMT-Go's platform.
161. Treebo also submitted that it is an admitted position on the part of OYO that it has no
objection to the properties of FabHotels and Treebo or any other entity being listed on MMT-Go's
platform. It stated that since relisting, the access to Treebo on MMT-Go's portal has been unfair
and discriminatory. There must be parity with other comparable hotels/hotel chains on visibility,
terms of ranking and placement, access to booking, market, customer data, functionality on the
platform. Therefore, it prayed that the access must be given by MMT-Go on a fair and non-
discriminatory basis.
162. Price parity clauses prevented other OTAs from offering better prices (commission rates).
The DG Report clearly indicates instances where price parity clauses were imposed such as
statement of Mr. Deep Kalra and several written communications to hotel partners to abide by
parity clauses. The overall effect of the parity clauses is evident from the fact that despite
allegedly having lower inventory than Yatra.com, and in Delhi even lower than Cleartrip and
Expedia, MMT-Go has the largest market share in the market ( ) compared to
Yatra ( ), Cleartrip ( ) and Expedia ( ). Further, it
denied the assertion of MMT-Go that adoption of parity clauses is as per the industry practice.
163. Treebo also objected to the reliance of MMT-Go on the Expert Economist Report and
satted that the same is inadmissible since it is contrary to the provisions of the Act and the
Competition Commission of India (General) Regulations, 2009 for the reasons detailed in its
Application dated 19.08.2022. Besides, it does not adhere to several legal standards and be
declared inadmissible. The Expert Report is biased, contains inherent contradictions and seeks to
serve the interest of MMT-Go. It was submitted that the Expert Report presents a completely
distorted and incorrect picture of the market dynamics by incorrectly considering hotel websites,
phone calls and walk-ins as substitutes to OTAs, which is a two-sided market and thus, included
a one-sided market in a two-sided market. Inclusion of ‘friends and family’ as a part of market is
inherently absurd. Further, on comparing Yatra's, EaseMyTrip's figures with that of MMT-Go, it is
evident that MMT-Go is way ahead. These figures are conspicuously absent from the analysis in
the main Expert Report but only form a part of the annexures of the Expert Report. The Expert
Report itself reveals that how a major part of OTA's business is driven by independent hotels,
however, relied upon screenshots taken for luxury/premium hotels. In sum and substance,
Treebo stated that the Expert Report is divorced from market realities and ignores the
observation of the DG. Based on this, Treebo submitted that Expert Report cannot be relied upon
and be set aside.
Observations and Findings of the Commission
164. The Commission has examined the material available on record, including the
Information filed by the Informants, Investigation Report of the DG, Cross-Examination Report of
the DG, written submissions filed by the parties and the oral submissions made by their
respective counsel on 12.09.2022 and 13.09.2022.
165. The allegations in the matter are with regard to abuse of dominant position by MMT-Go
under Section 4 of the Act and also with regard to a vertical commercial agreement between MMT
-Go and OYO under Section 3(4) read with Section 3(1) of the Act, which, as per the Informants,
has led to denial of market access to the hotel chains (namely, FabHotels and Treebo) and
independent hotels which were associated with such hotel chains. For examining allegations
pertaining to Section 4 of the Act, delineation of the relevant market is essential to ascertain
dominance and for otherwise analysing the alleged conduct of MMT-Go in the present case.
Relevant Market
166. Delineation of relevant market, for the purposes of ascertaining MMT-Go's market
position, has been the most contentious issue throughout the proceedings in this matter. This is
evident from the sheer volume of time devoted by the parties to this aspect in their written
responses as well as their oral submissions. The Commission has given thoughtful consideration
-----------------------------------------------------------------------------------------------------------------------------------------------------------
to the data and material placed on record, including the expert reports relied upon by MMT-Go
and FabHotels and the detailed submissions made by the parties during the course of hearing on
this aspect.
167. The DG has delineated the relevant market as ‘market for online intermediation services
for booking of hotels in India’. For arriving at this market definition, the DG inter alia examined
the substitutability between online hotel booking channels with offline channels of hotel booking
based on the information gathered from 21 hotels, and then carried out a SSNIP test to verify
and reach a conclusion. Further, the DG evaluated whether other channels of distribution, e.g.,
offline travel agents, MSS, GDS, corporate booking, IRCTC, MICE, and meta/search platforms
Google, Tiktok, Facebook and Instagram form part of the OTA market. Moreover, the DG looked at
Clause 1.1.10 of the agreement entered between MMT-Go and Treebo, according to
which . The services offered by OTAs are
homogenous throughout the country and consumers can access it from any part of the country.
In view of the above, the DG defined the relevant market as “market for online intermediation
services for booking of hotels in India”.
168. MMT-Go has inter alia criticised the DG's conclusion stating that the said conclusion is
based on (i) an erroneous analysis of substitutability between the online and offline hotel booking
channels; and (ii) an incorrect assumption that OTAs offer a unique service i.e., the ‘search,
compare, book’ (SCB) functionality.
169. It has been averred that DG's “substitutability” analysis is erroneous as it relies on a
survey of twenty-one (21) hotels i.e., sixteen (16) standalone and five (5) chain hotels, and
incorrect understanding of the statements made by OYO and other OTAs. This is stated to be an
insignificant sample size out of the vast universe of hotels in India which is not geographically
representative, besides being biased. Further, to counter DG's conclusion on the complementarity
of online and offline modes, MMT-Go submitted that the multichannel distribution strategy
adopted by hotel partners shows inter se competition between distribution channels and not
complementarity and it is being utilised by hotels to maximize revenue, in light of the daily
perishable nature of the end product i.e., room night. Depending on various price and non-price
factors, hotels may completely switch or partially skew their allocation or distribution in favour of
one or more channels. Notably, booking a hotel room on one channel leads to a reduction of
inventory across all channels. Therefore, the distribution channels cannot be said to be
‘complementary’, merely because a hotel is using various booking distribution channels at the
same time.
170. MMT-Go has also criticised DG's reliance on German Bundeskartellamt's HRS decision,
and the Priceline/Momonda case stating that market analysis contained in EU's regulatory
decisions cannot be supplanted into the Indian context due to differences in market structure and
realities. MMT-Go has also made other claims like comparatively low internet penetration in India
and Indian consumers being more price-sensitive than European consumers to support its
contentions.
171. As per MMT-Go, DG's determination of the relevant product market is fraught with
inconsistencies and evidences a clear bias. Further, MMT-Go has also placed on record the MMT-
Go Economist Report to propose a wider relevant product market, which should not be narrower
than the online hotel booking market (including OTAs, direct online booking at hotel's website,
other online modes). In the alternative, the overall hotel booking market has been proposed
which is stated to include all online and offline channels of distribution. Such propositions have
been made based on Kadence Consumer Survey which are performed by Kadence International,
commissioned by MMT's expert economist (Compass Lexecon) on behalf of MMT-Go along with
the Mordor Intelligence Report.
172. The Informants (FHRAI, FabHotels and Treebo) have strongly countered the submissions
made by MMT-Go and have submitted that the relevant market is not broader than the market for
online intermediation services for hotel booking.
173. FabHotels has provided the following limitations of the Kaydence Survey and the MMT-Go
Economist Report, with regard to delineation of the relevant market:
a. The MMT-Go Economist Report applies the SSNIP test incorrectly as it starts with the
“market for online intermediation services for booking hotels”, or OTA services, as its first
candidate market. However, this is not the narrowest possible candidate market. A more
appropriate starting candidate market would have been the “market for online
intermediation services for booking budget hotels”. Competitive dynamics may be different
-----------------------------------------------------------------------------------------------------------------------------------------------------------
for online intermediation for budget hotel bookings than for the booking of higher end
hotels.
b. The Kadence Consumer Report contains several design flaws, its sampling methodology is
unclear and involves snowballing, a technique where new respondents are recruited using
referrals from existing respondents, which leads to non-representativeness. It fails to
distinguish between the type of hotel respondents booked, which could lead to misleading
results given the likely non-representativeness of the sample. Its results are irrelevant to
the period of the alleged infringement since the survey was conducted between 18.01.2022
and 06.02.2022, but the DG investigates conduct that took place between January 2017
and March 2021. There are several reasons why the results of a survey carried out in early
2022 may not be reflective of consumer behaviour in 2017-2021 and Metasearch is a
relatively new phenomenon - Google Hotels was only launched in March 2019 and was
simply not an option for a significant part of the alleged infringement period. Finally, several
questions are framed to exploit acquiescence bias, a psychological bias towards agreeing to
statements in surveys. For instance, the Kadence consumer survey's question B9.1 “I keep
switching between offline and online modes for hotel bookings” could be reformulated as
“how often do you switch between offline and online modes for hotel bookings”. Similarly,
Question B2 asks:“(p) lease tell me, which of the following modes did you check before
making this booking?” The wording of the question is extremely vague and could lead to
misleading responses and it does not specify whether the consumer checked the alternative
modes in relation to the current booking, or whether the consumer had checked alternative
modes at some time in the past in relation to another booking. It also does not specify
whether the consumer checked the alternative modes specifically to compare price, or to
gather other information. The responses are entirely consistent with, for instance,
consumers looking at websites or social media for additional pictures before making the
booking.
c. Kadence Survey states that, “seventy-five (75%) of the hotels having their own website also
advertised on search engines like Google, Tripadvisor etc.” However, the reply does not
clarify (a) what % of the hotels who have their own website are budget hotels, (b) what %
of the 75% are budget hotels, (c) whether search engines like Google, TripAdvisor, Trivago
etc. redirect end-consumers to OTAs or to direct websites of the hotels, (d) what % of
budget hotels have their own websites, and (e) what % of the hotels directly listed on
search engines as against those shown by virtue of their listing on OTAs that have
contractual arrangements with search engines.
d. Even if the Kadence consumer survey is taken at face value, the MMT-Go Economist Report
interprets them incorrectly. That consumers have considered and used multiple booking
channels in the last four years does not imply that they considered them substitutable for
the same booking. Consumers consulting other channels before ultimately booking on OTAs
is also consistent with consumers gathering non-price information from other channels
before booking on OTAs. Consumers being price sensitive does not mean they do not
consider other factors while choosing between alternatives that are priced similarly. Lastly,
consumers preferring to visit hotels in person may be irrelevant for the vast majority of OTA
bookings.
e. The MMT-Go Economist Report's other arguments on consumers substituting between
various channels are also flawed. Consumers are not incentivised to multi-home across
booking channels by ad-hoc discounts as these only apply to OTAs in the presence of parity
clauses. Contacting hotels directly for a lower price is not viable in the case of most budget
hotels; many of whom also do not offer real-time online booking. Consumers also face
potentially large switching costs arising from OTAs' loyalty programs and the time and effort
customers put in before making a booking. Neither metasearch engines nor hotel websites
provide the entire search-compare-book (SCB) functionality on their own, and franchise
chains sufficiently differ from OTAs on several dimensions for them not being substitutable
with other channels.
f. Lastly, the MMT-Go Economist Report's analysis of whether hotels regard distribution
channels as substitutable is flawed. That hotels are often present on various channels does
not imply substitutability and is also consistent with complementary use to target different
consumer groups. Hotels filling fewer rooms through OTAs during periods of high demand
does not indicate substitutability between channels, but rather that direct channels are
-----------------------------------------------------------------------------------------------------------------------------------------------------------
preferred to OTAs (due to higher margins), which are used to fill inventory, hotels are
unable to sell directly. Consequently, the different channels should be seen as complements
rather than substitutes.
174. Further, it is also noted that FabHotels, in its rejoinder dated 18.08.2022, in response to
MMT-Go's comments and objections to the DG Report, has stated that Mr. Rajesh Magow, Co-
founder and Chief Executive Officer of MMT has accepted that OTA channel is unique and direct
hotel supply channel does not impose any competitive constraints. FabHotels also submitted that
search sites such as Trivago and TripAdvisor only show options offered by OTAs and redirect end
consumers to OTAs' websites.
175. FabHotels has also provided several reasons for the online OTA market being distinct
from other online channels and offline channels for booking of hotels. First, budget hotel
franchisors have to enter into separate agreements with a search engine/search site to get their
properties listed on the portal of the search engine/search site, which serve as marketing tools
rather than a distribution channel. This is because search engine/sites do not offer booking
functionality and simply redirect users to the websites of the franchisors. OTAs, on the other
hand, charge hotels only when a booking is made. Therefore, search engines and search sites
serve as marketing tools rather than distribution channel for hotel inventory. Second, even if
search engines/search sites are to be considered as alternate distribution channels, the same is
not a viable option for budget hotel franchisors. The cost per-click can be prohibitive. FabHotels'
cost-per-click and the per transaction cost on Trivago for the 3-month period of July 2018 to
September 2018, immediately following delisting from MMT-Go portals, demonstrates the very
high transaction cost for hotels/chains of hotels regardless of whether the visiting consumer
ended up booking or not. Therefore, listing on search sites is not a viable alternative. Lastly,
search results are likely to be overestimations since several of the properties may not be
“bookable” on the search engines, because hotels might list on a search engine to receive reviews
from consumers and visibility but will not list its inventory for booking. Therefore, when a
consumer searches for a hotel in a locality, the hotel and its reviews will appear, however, the
hotel will not be bookable via the search engine.
176. FabHotels have also pointed out that MMT-Go's reliance on the Google-Bain Report is also
flawed because the report looks at the entire hotel booking ecosystem as one market and fails to
consider that demand for luxury and mid-market hotels is different and distinct from demand for
budget hotels. Further, benefits such as priority check-in, free room nights (RNs), personalised
experiences, complimentary meals and access to special services are not provided by the budget
hotels. Mostly, budget hotels do not even have websites to offer direct booking. Therefore, MMT-
Go's argument that these benefits sway consumers towards direct websites, is untenable.
177. Treebo has submitted that the imagined market difference alleged by MMT-Go to say that
European precedents such as German HRS case and Booking.com case are inapplicable in Indian
context cannot be accepted. Contrary to the MMT-Go Economist opinion and argument of MMT,
these precedents are squarely applicable in the instant case. In the HRS case, while internet
penetration in Germany was as high as 82% in 2012, the online booking was 30.10%. Yet, the
competition authorities considered online and offline as separate markets. In 2020, internet
penetration in India was merely 42%, yet the online hotel booking was already around 30%, in
fact more than 30% based on the results of surveys of MMT. Therefore, European precedents are
applicable in the Indian context as well, where the online booking is likely to grow far more than
Germany with the increase in internet penetration.
178. Additionally, Treebo has submitted that the alternates suggested by MMT-Go are contrary
to consumer behaviour in the app market. MMT-Go's assertion that consumers use MMT portal to
find out the rates and then book from alternate channel where the customer gets the best rate is
opposed to market realities and how consumers in digital markets operate. It is submitted that
relevant market has to be seen holistically and cannot be defined seasonally. The fact still
remains that even during the peak holiday seasons and other events, OTAs are essential
distribution channels, which are used by hotels for distribution.
179. The Commission has given thoughtful consideration to all the arguments made by the
parties, both in their oral as well as written submission, despite such submissions not being
explicitly mentioned herein for the sake of brevity. At the outset, the Commission notes that the
parties agree on relevant geographic market being India. It will, thus, now examine the
submissions made by the parties to support their rival propositions with regard to relevant
product market, in the ensuing paragraphs.
-----------------------------------------------------------------------------------------------------------------------------------------------------------
180. Before delving into the complexities of the assertions made with regard to market
definition, it is important to discuss and appreciate the purpose and context of relevant market
delineation. Relevant market definition provides a framework for the ultimate inquiry of whether a
particular conduct is anti-competitive. The main objective of defining the relevant market is to
determine systematically the competitive pressures facing the entity/firm under investigation.
The purpose is to identify the set of competitors, in both its product and geographical dimension,
that are capable of posing competitive constraints on each-others' behavior within the so defined
market. Such delineation, therefore, plays a crucial role in identifying the players in the market,
assessing their comparative strength, setting the limits of the market for assessing barriers to
entry/expansion, whether effective substitutes exist in the market, identifying the buyers to
examine the scope and extent of countervailing power they may be able to exert on the
sellers/suppliers etc.
181. While there is no dearth of literature and case law on delineation of relevant product
market, assessment in competition cases cannot be bereft of facts specific to a matter. In every
case, it is necessary to examine the particular circumstances in order to answer a basic
straightforward question : which products or services sufficiently ‘compete’ with each other to be
sensibly regarded as being substitutable in the same market? The basic purpose is to gauge
competitive constraints i.e., do the products alleged to form part of the same market, act as a
competitive constraint on the impugned conduct of the allegedly dominant firm? To answer these
questions, it is imperative to consider demand-side substitutability by essentially looking at why
a given good or service is being bought. Market definition provides a tool to draw the boundaries
within which to asses a particular question, most prominently concerning the conduct, theory of
harm, and anti-competitive effects alleged. This will inform the extent to which
customers/consumers are able to switch to alternative products/services, in the event of an
increase in price, which will help in identifying all those products/services that constitute the
most immediate constraint on suppliers of a given product/service.
182. The Commission notes that MMT-Go's Economist Report contain surveys carried out by a
market research agency, Kadence. MMT-Go has submitted that the Kadence Survey is based on
information from a more statistically representative sample of two thousand and two (2002)
adults who had made an online hotel or travel package booking in the last four years, covering a
range of age and income groups and five hundred and twenty-four (524) hotels located across
fifty (50) cities which sell hotel rooms through OTAs, covering both independent and chain
hotels, and budget, mid-range and luxury hotels. The Kadence surveys are stated to have been
performed on the basis of face-to-face interviews with consumers and hotels adopting
methodology which can ensure impartiality and accuracy. The survey included questions on how
hotels decide to apportion their inventory across the various distribution channels, and how those
consumers who have booked using OTAs use the alternate distribution channels.
183. Based, inter alia, on the survey results and a market report prepared by Mordor
Intelligence relying on publicly available information, and also the information provided by
parties during investigation, the MMT-Go's Economist Report argues that the relevant product
market is not wider than the overall hotel booking market and not narrower than online hotel
booking market.
184. MMT-Go, and also OYO, has argued that online and offline are part of the same relevant
market as both these channels are used by the end-consumers alternatively to make hotel
bookings. Further, a lot of emphasis has been laid on the price sensitive nature of the Indian
consumers and low level of internet penetration to suggest that consumers may prefer to directly
walk-in at a hotel if the prices are slightly higher at the OTAs or may even choose to stay with
friends and family in the alternative.
185. Some of these arguments are misconceived and self-serving, despite the degree of
sophistication with which they have been presented, with an earnest attempt to supplement
them with data, third-party reports and surveys.
186. Interchangeability or substitutability lies at the heart of relevant product market
assessment. Will the consumers or business users, using the services of MMT-Go move to
alternatives in the event of the price being charged to it being increased by a small but
significant amount? The precise boundaries of markets, which are after all merely the result of an
intellectual exercise, will change depending on the context in which they are ‘drawn’. Market
Definition, therefore cannot be dehors of the context and facts and circumstances of the case at
hand as antitrust markets are defined around the competitive constraints on particular economic
-----------------------------------------------------------------------------------------------------------------------------------------------------------
entities in the context of a specific legal enquiry. To contextualize the discussion, the first thing
to be considered here is who is this ‘user’ that should be the focus of assessment. If this starting
point is not done correctly, the assessment that follows is bound to suffer from infirmities. The
instant case relates to the conduct of an enterprise that operates an online platform, which
connects users with various travel/tour related service providers, such as hotels, airlines, trains,
buses etc. As the alleged conduct under scrutiny is vis-à-vis hotels and franchise hotel service
providers, assessment of dominance and relevant market delineation will have to be necessarily
carried out from their standpoint. Thus, the starting point for defining the scope of relevant
market would be the service that the enterprise under scrutiny, i.e. MMT-Go, offers to hotels. The
next step will be to identify such alternate services that in terms of price, characteristics and
intended use could be considered substitutable from the hotels' perspective.
187. The Commission at the outset observes that MMT-Go offers intermediation service that
enables users to search hotels, make a comparison between hotels in terms of price and other
relevant factors and book a hotel on the same platform. As a corollary, it enables hotels to list
their inventory, get visibility to potential customers and sell inventory on the same platform. All
such platforms, or online travel agencies (OTAs), that offer these services as a one-stop-shop, are
substitutable from the hotels' perspective and, thus, form part of the relevant market.
188. MMT-Go has argued that since an OTA is an intermediation platform between consumers
and hotels, while defining relevant market, it is appropriate to consider the extent of demand-
side substitutability on the consumer-side as well as on the hotel-side of the platform.
189. In case of two-sided or multi-sided markets, a platform caters to different user groups.
Such sides may be interlinked and interdependent. It is important to understand the nature of
the interaction between the different sides of a multi-sided platform so as to ascertain the impact
of such interaction or interlinkages in the analysis. This may be truer for intermediation
platforms, since the user-groups are linked by the presence of positive indirect network effects.
In the instant case, the intermediation service is provided through a two-sided platform, which
connects two distinct user groups, i.e., consumers and hotels/hoteliers. Both these user groups
positively value the presence of more users on the other side of the platform, as it creates higher
visibility and potential sales (for hotels) and wider variety and options (for consumers). While
there are obvious interdependencies between the two sides that transact on the platform
provided by OTAs, the substitutability analysis for one side cannot be automatically transposed to
the other side. Multihoming by business users may not always indicate a broader relevant
market. For instance, multi-homing by app developers may only be indicative of the market
power held by different app stores, since developers cannot afford to ignore the entire user base
of a given operating system.
190. The advent of technology has given rise to newer forms of transactions and ever evolving
nature of the platforms. While some platforms operate as transaction platforms where buyers and
sellers use the intermediation services of the platform to consummate their transactions, others
operate as non-transaction platforms, where there are multiple sides, not necessarily directly
transacting with each other. In the latter platforms, the platform is concerned essentially with
user attention which can then be monetised in different ways e.g. targeted advertising. Even
within these sub-segments, the platforms may have different features, e.g., the transaction
platforms can be purely ‘matching-making platforms’ where users on different sides of the
platform are brought together to effectuate one to one transaction, e.g., cab aggregators like
Uber/Ola, or they can be like OTAs where multiple users can see the various options available and
decide whether to effectuate a transaction or not. Given the diversity of platform markets, and
their different network effects and pricing strategies, it is imperative that the specificities of each
platform are appropriately factored in while weighing different approaches and alternatives to
market definition. One size fit all approach may lead to absurd outcomes in such markets.
Further, the timing is also a crucial factor. The assessment in rapidly changing digital markets
cannot have a static approach. The vehement reliance placed by MMT-Go upon the Commission's
order in Combination Registration No. C-2016/10/451 (acquisition of 100% of Ibibo Group
Holdings by MMT Ltd) dated 18.01.2017, is also found to be misplaced. In the said matter, the
Commission carried out the substitutability assessment between online travel agents with other
distribution channels from the consumers' point of view. In the present case, given that the
impugned practices relate to the contractual arrangements between hotels and online booking
platforms, the prime focus ought to be on the hotels' side of the market, though the consumer
side perspective can supplement this treading.
-----------------------------------------------------------------------------------------------------------------------------------------------------------
191. Undoubtedly, an OTA is an intermediation platform, bringing together end-consumers

and hotel partners. But it does not necessarily follow that such categorisation, in itself is
sufficient to impel a process and a conclusion that involves only one exercise with regard to
substitutability. There are two ‘distinct user groups’ using the platform for ‘distinct set of
services/products’ and any assessment of substitutability without factoring in such distinction
may lead to incorrect identification of competitive constraints faced by an enterprise/entity in the
market.
192. At the cost of repetition, the question that should guide the assessment is ‘why’ a given
good or service is being bought by a particular user group. Though the primary purpose of the
platform is to intermediate transaction between these user groups, the answer to this question
‘why’ may differ for each user group. To put it simply, in case of an OTA, the intermediation
services are offered to two different but interdependent consumers—end-consumers and the
hotel partners. However, the end-consumers use the platform to ‘search, compare and book’ the
hotels available on an OTA, while the hotel partners may be using the OTAs for higher visibility
and to avail other attractive features incentivising potential travelers to use the OTA for bookings.
Towards that overall objective, from the point of view of the hotel partners, even if the bookings
are finally made through another distribution channel, the traffic may still be attributable to the
visibility and brand recognition such hotels have attained merely by being on the OTAs. What
follows from the discussion is that when apparently there are two distinct products/services
which are being supplied (by the same seller i.e., the OTA) to two distinct set of buyers (end-
consumers and hotel partners), ascertaining substitutability only from the perspective of one user
group (i.e. the end-consumer in the present case) may erroneously conflate the competitive
constraints that exist separately and distinctly in relation to each user side.
193. Undoubtedly, the interdependencies and interlinkages that arise out of interactions
between two or more user groups should not be disregarded. The role of such interdependencies
at the time of delineating relevant market should, however, be limited to understanding the
impact of such interactions on the substitutability analyzed primarily from the aggrieved user
side. It is important that incorporation of complexities arising out of network effects and
interlinkages at the stage of market definition should not perplex what is essentially intended to
be a relatively straightforward assessment.
194. Notwithstanding, the Commission, for the sake of completeness and also for dissecting
certain arguments made during the hearing, finds no harm in examining substitutability from the
stand point of the end-consumers as well while using the services of an OTA. From the end-
consumers perspective, the seamless integration of ‘search, compare and book’ functionality of
an OTA is a unique feature. MMT-Go has argued that unlike in the European markets, Indian
consumers being particularly price-sensitive, are driven by the need to find comparable hotel
rooms at the lowest price point and they multi-home extensively and switch across multiple
channels for booking of hotel rooms. Also, as per MMT-Go, the seamlessness of the ‘Search,
Compare and Booking’ (SCB) functionality has been over-emphasized by the DG, given the fact
that the two-step functionality of a meta-search engine (like Google) allows ‘search and compare’
plus direct website of the hotel which allows the ‘booking’ functionality is substitutable, and often
undiscoverable, from the end-consumer's perspective. It is argued that ‘[o]ften, a user does not
realise that they are making the booking on a different webpage and therefore, the booking
functionality is seamlessly associated with the search and compare functionalities.’ There are
other claims also with regard to the price sensitivity of the Indian consumer, which have already
been elaborated earlier.
195. Assertions of MMT-Go that an Indian consumer is comparatively more price sensitive
than those in Europe, can at best be termed as opinions which even if assumed to be true, are
not sufficient in itself to render the ‘Search, Compare and Booking’ (SCB) functionality test
redundant. In an ideal world, a consumer would always wish to make optimal decisions that
provide him/her with the greatest benefits and satisfaction. In the case of digital platforms,
consumers are flooded with innumerous heterogenous options to choose from, coupled with
distinct features of those options which may hinder simplistic decision-making based purely on
‘monetary price’. In an attempt to reduce this anxiety, consumers tend to simplify the process by
selecting some criteria to determine the best value for money. However, to say that such benefit
or best value is only derived from a lower price of a product would be an overstatement. Even for
a price sensitive consumer, a slightly higher price of product A over a competing product B would
be tradeable for a better quality or additional features without a noticeable/pinchable loss of
-----------------------------------------------------------------------------------------------------------------------------------------------------------
benefit or satisfaction. At this stage, it is important to understand what product/service MMT-Go

or an OTA offers to consumers (who are looking for booking a hotel option) on one side and a
hotel partner (that list its property on an OTA) on the other. Besides the booking functionality,
OTAs provide a wide functionality of comparing highly differentiated heterogenous hotel options
on various parameters such as amenities, quality of stay and customer ratings are provided which
affects decision making. Further, it provides various options to run a customised search to narrow
down the vast populations of hotels present on an OTAs using some objective parameters like
price range, location and distance from some reference point, type of property, star rating,
customer ratings, meal options available etc. All these objective criteria cumulatively assist the
consumers to narrow down the available options to a considerably smaller pool of options to
choose from. Thereafter, the consumer can apply further subjective criteria e.g., comparing
pictures of the hotel rooms, facilities available at each hotel, additional assortment of
products/services offered by each hotel, qualitative customer reviews about the hotels etc. to
further narrow down the available options. There is also an option to sort the narrowed down
search results on the basis of various parameters (e.g. popularity, price, user ratings, relevance
etc.), of which ‘price’ is just one of the criteria. For a given property/hotel, a consumer may multi
-home to see what prices are being offered by different distribution channels such as options
available on meta search engines, direct hotel website and OTAs. However, for enabling a
consumer to arrive at a decision to choose a particular property, presence of such a
hotel/property on the OTA plays a vital role. Even a price sensitive consumer, who multi-homes
to compare prices offered by different avenues for a given option of hotel/property before finally
effectuating a booking, would first search and compare the innumerous options available within
his/her price budget/range.
196. MMT-Go has vehemently argued that consumers in India use a wide range of distribution
channels. It is stated that there is a strong substitutability between online and offline channels
within India. In the Kadence survey, when consumers were asked whether they agree with the
statement “I keep switching between offline and online modes for hotel bookings”, 63% agreed
or strongly agreed with the statement. Further, it is stated that offline channels (including walk-
ins) are the primary channel for distribution of hotel rooms in India, accounting for 75% of
bookings in the 2017-2019 period which is less than the percentage in Europe in 2019 (i.e.,
50%). The significantly lower share of offline sales in Europe, as per the MMT-Go's Economist
Report, suggests a weaker substitutability between offline and online channels in Europe and,
therefore, it is suggested that the market definition in the Bundeskartellamt's decision is not
directly applicable in the present case, as Indian consumers see offline channels as a viable
alternative to online bookings. It is also stated that 69% of consumers cite ‘better price’ as a top
three factor in choosing a distribution channel and 37% rank it as the top factor, as per the
Kadence survey. Further, the MMT-Go's Economist Report argues that ‘[a]s a result, Indian
consumers are more likely to shop around for the best available price compared to European
consumers. In the Kadence survey, 71% of consumers agreed that they get a ‘lower rate and/or
additional facilities when they book hotels offline’. This shows that Indian consumers are more
likely to turn to the cheaper offline channel, highlighting the structural differences between the
Indian and European market.'
197. There is a fundamental fallacy in these arguments. When it comes to internet penetration
in India, there is a huge divide between those using online channels and those still relying on
traditional modes of concluding their transactions. End-consumers, who use online mode of
transacting and making payments, those having a preference towards online channels, constitute
a set of end-consumers distinct from those who prefer direct walk-in or those having a preference
for offline channels. There may be a section of society which may still be using traditional modes
of booking hotels such as talking to a coolie or auto-rickshaw/taxi driver to suggest hotels; but
consumers belonging to this class appear to be mutually exclusive from those using online
channels of booking having a preference to pre-decide and book. Or at the very least, even if
there are consumers who use both these modes (online as well as offline), such consumers do
not appear to be using these channels of booking interchangeably for the same booking, given
the characteristically different offering that online and offline modes offer. Multi-homing even by
the same class of customers may not necessarily imply substitution in the sense used for the
purpose of defining markets. Even if, most customers use multiple methods to book hotels
(customers can choose more than 1 option for booking hotels as per the Kadence survey) this in
itself implies that these methods/channels are complementary and not substitutable even from a
customer's perspective. Thus, notwithstanding the relatively low level of internet penetration in
-----------------------------------------------------------------------------------------------------------------------------------------------------------
India, it may not be true to say that consumers using internet for booking hotels are
interchangeably also using offline mode. Online and offline modes being characteristically
different from each other do not appear to be catering to the same set of consumers and thus,
even from their perspective may not be considered to be interchangeable. Moreover, as the
Economist Report submitted by FabHotels mentions, with which the Commission concurs, that
consumers having considered and used multiple booking channels in the last four years does not
necessarily imply that they considered them substitutable for the same booking. This non-
interchangeability at the end-consumer side also explains the criticality of discoverability for the
hotel-side on each such different channel of distribution where the end-consumer is likely to
search and thus online and offline modes can no longer be considered substitute.
198. Further, the characteristic features of the OTAs, namely, convenience and ease of use in
terms of the time and effort required, including navigating the website, the collection of data,
speed of search and ability to compare the results, along with ability to book on the same page
may not be comparable with other online modes.
199. As regards the substitutability between OTAs and online meta/search platforms that offer
search and compare facilities to users, a key difference that exists is that the latter typically do
not allow selling of inventory on the platform. For instance, Google inter-alia advertises property
listing of various kinds including hotels, but it does not have a booking facility. Therefore, when a
consumer searches for a hotel in a locality, the hotel and its reviews will appear, however, the
hotel will not be bookable via the search engine. While it may be possible to view and compare
hotel prices in Trivago, booking a hotel room cannot be done through it. Further, the Commission
notes the argument of the Informant that since online transactions require sharing of personal
details as well as financial details related to credit/debit cards, consumers firstly, find it more
convenient using same channels for booking for ease of pre-filled/auto-filled personal and
financial details and secondly, find it more secure not to use their credit/debit card or net-
banking details on various web portals.
200. More so, the screenshots used in the MMT-Go Economist Report [at Figure 5-1 : Option to
compare hotels available on Google and Figure 5-2 : Various booking options available to the
user], which are reproduced below, provides some interesting observations as to why this
combination of meta search engines plus the direct hotel website may not pose any effective or
significant competitive constraints to OTAs:
[space intentionally left blank]
Figure 5-1 : Option to compare hotels available on Google [MMT-Go's Economist Report]1
-----------------------------------------------------------------------------------------------------------------------------------------------------------
[space intentionally left blank]

Figure 5-2 : Various booking options available to the user [MMT-Go's Economist Report]
201. The search results shown in Figure 5-1 and 5-2, reproduced above (as taken from the
MMT Economist Report), provides links which as per MMT-Go provides a seamless option to book.
However, most of these links to ‘visit site’ are also mainly from different OTAs appearing under
the head ‘Ads-featured options’ displayed before the other ‘All Options’ containing the direct link
to the hotel's website.
202. This brings us to the more pertinent substitutability assessment for the purposes of the
present matter i.e., substitutability from the point of view of the hotels, including the franchise
hotel service providers, who use or avail the services of the OTAs to list their inventory so as to
have better visibility and accessibility to the end-consumers. The aforesaid screenshots not only
indicate the purpose but also show the necessity and significance of having a presence on OTAs
for a hotel partner. Metasearch engines like Google are primarily advertising/marketing channels
where hotels or OTAs can display their properties.
203. This is further clear from the submissions made in the MMT-Go's Economist Report which
mentions the role of Google and other metasearch engines by various OTAs in their annual
reports. In its FY 2021 annual report, Yatra stated:
“we rely heavily on Internet search engines, such as Google, Bing and Yahoo! India, to
generate traffic to our websites, principally through the purchase of travel-related keywords”.
204. Similarly, MMT-Go in its FY2019 annual report stated:
“…a significant portion of the traffic to our websites is driven by Google, and, to a lesser
extent, we use other search and metasearch websites and social websites to generate traffic to
our websites, principally through payper-click advertising campaigns”.
205. To quote from the MMT-Go's Economist Report ‘[b]ased on my review of Go-MMT's data, I
find that, in FY2019, 42% of its overall traffic originated from search engines such as Google,
-----------------------------------------------------------------------------------------------------------------------------------------------------------
metasearch engines and other digital display advertisements. Of this, 28% of the traffic was
directed from search engines such as Google via their SEO, SEM and meta services, and another
6% of traffic came from metasearch engines Trivago and TripAdvisor’.
206. These assertions further reiterate the relevance and need for a hotel or franchisee service
provider to be present on an OTA which can amplify its visibility to the other user side, not only
directly to the users present on the OTA but also those searching through meta search engines
and then booking through modes other than OTAs.
207. Arguably, a hotel can also list itself on Google ‘without paying any cost’. However,
presence and visibility are two different things. When a hotel partner opts for a channel of
distribution like an OTA, it is more for visibility (and discoverability) and not just for mere online
presence. Presence may be sufficient for those hotel chains or hotels that have a loyal customer
base or already have a reputation, but for most hotels, it is the visibility that matters. Visibility is
focused to ensure that the target market can discover the hotels, as opposed to merely being
present on the online portal. And the visibility on search engines like Google or Trivago may not
come without a cost. The submissions made by FabHotels are relevant in this context. It has
been submitted that the portals of the search engine/search site serve as marketing tools rather
than a distribution channel. They further submitted that even if search engines/search sites are
to be considered as alternate distribution channels, the cost is prohibitive and is not a viable
option for budget hotel franchisors. FabHotels' cost-per-click and the per transaction cost on
Trivago for the 3-month period of July 2018 to September 2018, immediately following delisting
from MMT-Go portals, has been stated to be very high, regardless of whether the visiting
consumer ended up booking or not. Therefore, the Commission is of the view that listing on
search sites is not a viable alternative to OTA listing. Rather their presence on OTAs also ensures
their visibility on other search engines and social networking sites where such OTAs are targeting
their respective advertisements. For an OTA, because of the large network of properties that it
hosts, it makes economic sense to incur such marketing cost, to divert traffic to its
intermediation platform where it is not only intermediating hotels room nights but also flights,
packages, buses, trains etc. The strength and ability of an OTA to incur such marketing costs
which can ensure better visibility to all its listing partners from different verticals is also an
important feature that reinforces the necessity for a hotel partner to list itself on an OTA. This is
further accentuated by the fact that the results shown on metasearch engines like Google also
depend on the presence of such hotels on the OTAs which appears to be the prominent source of
data regarding presence of hotels in different geographic locations. Thus, from the hotel partners
perspective, the main reasons for listing on an OTA is higher visibility and to avail other attractive
features incentivising potential travelers to use the OTA for bookings. Even if the bookings come
from offline channels or other online channels (other than OTAs), many of these bookings are
incentivised through OTAs.
208. Several times during the hearing, the learned Senior Counsel for MMT-Go argued that the
end-consumers as well as hotel partners multi-home and thus, rely on different distribution
channels for bookings. It was also argued that the bookings through OTAs constitute a minuscule
percentage of the total bookings for a hotel and thus, for a hotel, it is only one of the modes of
reaching the end-consumer. Though this argument may seem attractive at first instance;
however, to the Commission's mind, multi-homing does not necessarily imply a single relevant
market encompassing all options used by end-users to consummate their bookings. Presence of
hotels on multiple channels does not necessarily mean substitutability and can also be consistent
with complementary use to target different consumer groups. As also stated in FabHotel's
response, hotels filling fewer rooms through OTAs during periods of high demand does not
indicate substitutability between channels, but rather that direct channels are preferred to OTAs
(due to higher margins), which are used to fill inventory that hotels are unable to sell directly.
Mere presence for multi-homing is not likely to be decisive on its own regarding the contours of
the market and the consequent market power. Consequently, the different channels should be
seen as complements rather than substitutes.
209. Furthermore, even in cases where one user side can multi-home (end users in the
present case), considering that markets are characterised by users using these distribution
channels to consummate their transactions at any given point of time, the other side (i.e., hotels)
may not see these channels as substitutes. For the hotels, these platforms are complementary
ways of reaching the end consumers. The table [namely Table 3-1] relied upon by MMT-Go in its
Economist Report, reproduced below, is quite illustrative to explain this point.
-----------------------------------------------------------------------------------------------------------------------------------------------------------
Table 3-1 : Hotel respondents' answers to question:“What is the approximate share

of the bookings received at your hotel via the modes given below, in a year” in the
Kadence Hotel Survey
Modes Independent/Standalone Large Franchise Budget/Mid Overall
Hotel Hotel Chain Segment
Chain Chain
Online Travel Agents 29% 38% 36% 38% 33%
like Yatra,
Booking.com,
MakeMyTrip, etc.
Direct-Hotel Via 14% 11% 15% 15% 14%
Phone call
Direct-Hotel Via 6% 10% 5% 8% 6%
Website
Direct-Hotel Via Walk 21% 7% 20% 16% 19%
-in
Corporate Tie-up i.e., 8% 14% 6% 13% 9%
direct tie-ups of your
company/employer
with the hotel
Offline large travel 4% 6% 4% 4% 4%
agents/services like
Thomas Cook, SOTC,
etc.
Offline small travel 7% 5% 4% 3% 6%
agents or local travel
agents
Other mediums like 6% 3% 5% 3% 5%
local touts etc.
Direct- 4% 4%0 3% 1% 4%
WhatsApp/Instagram
etc.
Others 0% 0% 1% 0% 0%
Total 100% 100% 100% 100% 100%
Of which online 39% 53% 45% 47% 43%
Of which offline 61% 47% 55% 53% 57%
Of which direct 53% 47% 50% 53% 52%
Of which indirect 46% 53% 49% 47% 48%
Notes : [1] Based on a sample of 524 hotels. [2] In the summary rows at the end of the
table, online includes ‘Online Travel Agents’, ‘Direct - Via Website’ and ‘Direct -
Whatsapp/Instagram etc. [3] In the summary rows at the end of the table, Direct includes
‘Direct hotel - Via Phone Call’, ‘Direct hotel - Via Websites’, ‘Direct - hotel - Via Walk-in’,
Corporate Tie-Up i.e., direct tie-up of your company/employer with the hotel’ and ‘Direct -
Whatsapp/Instagram etc.’ [4] the summary rows at the end of the table do not include
Others' [5] I2 have re-based the response to question BO of the Kadence Hotel Survey to
account for the sample size for each of the categories above.
[Source : Exhibit CL-2(c) : Kadence Hotel Survey, question number BO]
210. The aforesaid table, reproduced from the MMT-Go's Economist Report, captures the
response from the 524 hotel respondents on the approximate share of bookings received at their
respective hotels via modes stated above, in a year. These modes comprises of all possible online
and offline modes, which according to MMT-Go pose competitive constraints on each other.
Apparently, the share of bookings received from online and offline mode is 43% and 57%,
respectively. In the overall scenario (offline online channels taken together), OTAs contribute the
highest share of bookings (33%). This is much higher than other modes of distribution, with the
next highest being direct-hotel via walk-in at 19%. Further, of the total bookings (43%) coming
from online channels of distribution, OTAs contribute 33%. Also, as mentioned earlier, bookings
-----------------------------------------------------------------------------------------------------------------------------------------------------------
through other online modes may also be dependent upon the presence of a hotel on an OTA and
to some extent, even if the booking is not directly done through the OTA, the booking received by
the hotel through other online channels is attributable to its presence on OTA. An important
question which then needs to be answered is whether the hotels or franchisee service providers
(like FabHotels and Treebo) view any of these channels as substitutes to OTAs and whether any
hotel can afford to delist from the OTAs for a small but significant increase in price charged by
such OTAs (i.e. commission) in substitution to other channels? From a perusal of the survey
results reproduced supra, the answer to the question is seemingly negative. Moreover, the online
mode of distribution through third party platforms, which provide the facility to search, compare
and book at the same place, is characteristically distinct from the services that the offline mode
such as travel agents provide. It is also noted that as per MMT-Go's own submission, independent
or unbranded hotels forms the largest share of hotel inventory at 72% as of 2018 (as provided in
page 271 of the MMT-Go Economist Report) and economy or budget hotels (offering lodging at
relatively low prices and usually priced below INR 3,000 per night) account for 70% of the total
room inventory in India (Source : MMT-Go Economist Report). Thus, in carrying out the
substitutability assessment, considerations/factors that are relevant for its largest constituency,
i.e. the budget hotels, cannot be ignored.
211. Besides the OTAs being functionally and characteristically different from other channels
of distribution from the perspective of end-consumer as they provide a seamless ‘search,
compare and booking’ functionality; the presence on the OTAs from the perspective of hotel user-
side is more necessitated to develop overall demand for the product which these hotel partners
are trying to sell, as termed by MMT-Go, ‘perishable room nights’. Even if all the bookings are not
consummated through the OTAs and are ultimately booked through other channels, the other
functionalities present on OTAs help in developing the overall demand by better visibility and
discoverability which is most important for a hotel partner.
212. MMT-Go has extensively argued on why direct booking made on hotels' own websites
should also be included in the relevant market. At the outset, it is noted that there is no
‘intermediation’ involved in direct booking, and thus by no logical reasoning can it be even
considered for a putative substitutability analysis. Hotels and OTAs are in a vertical relationship
and not horizontally placed competitors providing the same services. While a consumer does
indeed have the option of booking a hotel from a hotel's website or on an OTA, that does not
suggest substitutability between hotel websites and OTA, nor does it obviate the necessity for a
hotel to be listed on OTAs. Budget hotels, which form the majority of the hotels market in India,
commonly do not have brand recognition working in their favour, which could attract consumers
directly to their websites. In fact, many budget hotels do not even have websites to offer real
time online booking. FabHotels estimates that over 95% of its members do not have websites
that offer real-time direct booking.
213. Even the franchise budget hotel chains, which may have relatively better brand
recognition compared to standalone budget hotels, need to list their inventories on OTAs for
visibility and for consumers to know that they have franchise hotels in a particular location, which
is critical for inter-se competition between the franchise chains themselves. Even when looked at
from the users/customers' perspective, as the Economist Report submitted by FabHotels points
out, there are important differences between websites of franchise chains and OTAs that prevent
them being substitutes. Franchise chains have limited variety, since they only list their
franchisees, whereas OTAs list a much wider variety of properties spanning several franchise
chains, hotel chains, and independent hotels.
214. Further, the Commission also does not find much merit in the claimed market differences
in India and Europe to argue that the European precedents are inapplicable in the present case.
It is noted that during the HRS case, while internet penetration in Germany was as high as 82%
in 2012, online booking was 30.10%. Yet, the competition authorities considered online and
offline separate markets. In 2020, internet penetration in India was merely 42%, yet the online
hotel booking was already around 30%, in fact more than 30% based on the results of surveys of
MMT.
215. For the foregoing reasons, in the facts and circumstances of the specific market under
consideration, the Commission is of the considered view that, firstly, online and offline are not
part of the same market and secondly, even within the online segment, OTAs constitute a
separate relevant product market. Viewed from the competition lens, the Commission does not
find that the various distribution channels argued by MMT-Go (e.g. direct bookings made through
-----------------------------------------------------------------------------------------------------------------------------------------------------------
the hotel's own website; corporate sales; offline travel agents; unorganised intermediaries such
as coolies, taxi drivers, etc.; metasearch services such as Trivago, Trip Advisor etc.) to be
constraining MMT-Go. The relevant market in the present case, thus, is “market for online
intermediation services for booking of hotels in India”.
Dominance
216. In the relevant market delineated above, MMT-Go is alleged to be engaging in abusive
conduct within the meaning of Section 4 of the Act. The scheme of the Act is such that provisions
of Section 4 are only attracted when the entity under scrutiny holds a dominant position in the
relevant market. Thus, whether MMT-Go holds a dominant position in the relevant market, i.e.
“market for online intermediation services for booking of hotels in India”, is a key issue for
determination.
217. The Act explains dominant position as a position of economic strength enjoyed by the
enterprise in the relevant market, which enables it to operate independently of competitive forces
prevailing in the relevant market or affect its competitor or consumer or the relevant market in its
favour. Such ability of the enterprise to behave independently of competitive forces needs to be
assessed in light of all relevant circumstances and the factors enlisted under Section 19(4) of the
Act. A complete and correct assessment warrants comprehensive examination of the competitive
conditions of the market, with due consideration to the inherent characteristics of the market, the
market structure, the nature of competition, competitive strategies adopted by the market
participants and all such factors that strengthen or weaken the market position of the enterprise
under scrutiny. Thus, the assessment of a case would be unique to its own facts and the market
under consideration.
218. In the online intermediation services for hotel booking, MMT-Go as a group is stated to
be the market leader with 63% of domestic hotel online market share in 2017 as per the investor
presentation of MMT-Go, snapshot provided below.
Source : MakeMyTrip Investor Presentation May 2019 annexed in Annexure 32 (Reply dated
24.10.2020 submitted by FabHotels) at Page 3930 of the Investigation Report
219. MMT-Go has submitted that it is not dominant in any relevant market, though majority of
its arguments were made in light of the wider market definition proposed by it. Even in the
market defined by the DG, which has been accepted by the Commission supra to be the correct
relevant market for ascertaining MMT-Go's position, MMT-Go has submitted that it does not hold a
position whereby it can act independent of the market forces. MMT-Go has inter-alia stated that
the DG has adopted incorrect parameter to calculate market shares, has ignored the size and
resources of the competitors, over-estimated the entry barriers which do not exist in reality and
assumed dependence of consumers on MMT-Go without any basis.
220. The Informants have vehemently opposed the arguments made by MMT-Go which
according to them is the biggest and most prominent OTA for reaching the end-consumers.
FabHotels has submitted that the stayed Room Nights (RNs) is the right metric to assess market
position because it reflects the actual fulfilment of ‘SCB services’ that end-consumers/retail
consumers avail of. Further, MMT-Go's submission as recorded in the DG Report also supports
that any other metric will not accurately portray the market position. MMT-Go has stated that app
downloads does not necessarily mean booking or termed as a metric of strength of an enterprise
as such download does not necessarily indicate a converted or successful transaction through the
said application. Comparison of MMT-Go's stayed RNs (as available in its publicly available
-----------------------------------------------------------------------------------------------------------------------------------------------------------
financial statements) with booked RNs/stayed RNs of some of the other OTAs demonstrates that
MMT-Go does not have any effective competitor in the relevant market. Further, despite incurring
nearly USD 4.3 million in marketing and advertising expenses, EaseMyTrip generated negative
revenue from the hotels and packages segment in FY 2022. Fabhotels also relied upon the
following (comparison of MMT-Go's stayed RNs, as available in its publicly available financial
statements, with booked RNs/stayed RNs of Yatra and Cleartrip), to argue that MMT-Go does not
have any effective competitor in the relevant market.
MMT-Go (stayed Yatra (booked RNs) (B) as a % of (A)
RNs) - (A) - (B)
FY 2017 91,02,000 n/a n/a
FY 2018 2,09,98,000 ˜2,000,000 9.5%
FY 2019 2,59,11,000 ˜2,300,000 8.8%
FY 2020 2,90,43,000 ˜1,200,000 4.13%
FY 2021 84,35,000 ˜500,000 5.9%
FY 2022 1,52,79,000 ˜1,020,000 6.7%
MMT-Go (stayed Cleartrip (stayed (B) as a % of (A)
RNs) - (A) RNs) - (B)
FY 2017 91,02,000
FY 2018 2,09,98,000
FY 2019 2,59,11,000
221. Booking.com's growth has been in the alternative accommodation market. As per data
provided by Booking.com for November 2019, FabHotels sold room nights on
Booking.com, which is of total room nights sold on Booking.com in India in the same
month, implying that the total number of room nights sold on Booking.com in India per day
is . As per MMT-Go's quarterly report for the quarter ended 31 December 2019, MMT-
Go sold 84,72,000 room nights in three (3) months ended 31 December 2019 which would be
approx. 92,087 room nights per day for the period October 2019 to December 2019. In other
words, Booking.com which is reportedly the third largest OTA operating in India sold only 13.4%
of the room nights sold by MMT-Go during the same period.
222. Treebo has argued that even though the commission charged by MMT-Go ( )
is significantly higher than Booking.com ( ) the stayed RNs for MMT-Go was
significantly higher than any other OTA. Further, the fact that global OTAs with big inventories
and large resources have not been able to effectively penetrate the market, is itself evidence that
MMT-Go had blocked growth of these platforms by imposing restrictions through its agreements
with the hotels vide clauses such as D minus 3 and D minus 30, price parity etc. For instance,
OYO is restricted from listing on Paytm and Booking.com and other OTAs for last 5 days before
check-in.
223. Further, Treebo has also argued that MMT-Go's assertion that value is a more appropriate
proxy of dominance in the relevant market is incorrect and even if their argument is to be
admitted, it still shows MMT-Go to be unquestionably dominant. Red Herring Prospectuses and
Draft Red Herring Prospectuses filed by competitors with the Securities & Exchange Board in
India reveal that for the financial year 2019-2020, MMT-Go's gross revenue from bookings was
INR 432 billion, while Yatra's was INR 85.3 billion and for the financial year 2019-2020, MMT-
Go's gross booking volume from hotels was 59 million, and Yatra's was INR 1 million.
224. Treebo has submitted that MMT-Go has the largest consumer base of 51 million and
network effect kicks in owing to the largest user base. Owing to such a wide range, more
consumers prefer MMT-Go over other OTAs. Further, hotels also prefer MMT Portal over other OTA
portals due to presence of high number of consumers on MMT portal, which is evident by the
higher room night booked. MMT-Go imposed restrictions through its ‘D minus 3’ and ‘D minus 30’
clauses on FabHotels and Treebo and condition on OYO for exclusion of Paytm and Booking.com.
Resultantly, MMT-Go has a large inventory by virtue of such vertical integration which creates
network effect and thus provides it with competitive advantage. MMT-Go has unparalleled
position of strength giving it ability to provide discounts and new entrants do not have the user
base to compete with the network effect created by MMT-Go in its favour. The same clubbed with
the restricted clauses creates barrier to entry. There has been no effective new entrant in the
market. Players like Paytm were blocked by MMT-Go through their restrictive clauses. Further,
global players like Booking.com also has not been able to put any competitive constraint on MMT-
-----------------------------------------------------------------------------------------------------------------------------------------------------------
Go. Despite imposing the highest commission rate of , MMT-Go is the dominant player
in the market. Vertical integration between MMT-Go and OYO which led to exclusion of FabHotels
and Treebo from the MMT-Go's platform also resulted in reducing the bargaining power of chain
hotels as well as independent hotels. Treebo after being delisted lost its several hotel partners
and subsequently, after being relisted on MMT-Go, Treebo's hotel partners has grown significantly
from 372 hotels in August 2021 to 731 hotels in August 2022, thereby registering an
approximate 100% growth. Contrary to the claims of the Expert Economist that hotels can pass
the cost to consumers, due to price parity clause, it is not even possible for hotels to pass on the
cost to the consumers. Despite the increase in commission/other charges, hotels stick to MMT-Go
as it is an essential distribution channel. Therefore, there is limited countervailing buyer power
and hotels have limited ability to switch to alternative suppliers or self-supply.
225. The Commission has given a thoughtful consideration to the aforesaid submissions. At
the outset, the Commission observes that many of the factors and aspects discussed while
delineating the relevant product market have a bearing on the dominance assessment as well.
For example, the reliance of hotel partners on OTAs for having better accessibility and
discoverability, multi-homing not being a sufficient factor for expanding the scope of the relevant
product market to non-OTAs, role of network effect etc. may need to be considered in order to
segregate the players and then assess the position of the entity within the correct framework.
During the prima facie assessment, the Commission had observed that as per MMT's investor
presentation, which was annexed to the Information, MMT-Go together held 63% of domestic
hotel online market share in 2017. Further, during investigation, the DG also found that MMT-Go
has the highest market share in the OTA segment. Though MMT-Go has tried to discredit the
stayed RNs metric relied upon by the DG, the Commission is of the view that given the nature of
the market, that metric indeed is the appropriate parameter. An OTA is primarily an
intermediation channel, i.e. transaction platform, that connects hotels and end-consumers. Such
hotels list their heterogenous hotel rooms on OTAs which are sold on a per night basis. The per
night tariff for a night stay in a hotel available on an OTA may vary from as low as INR 500 to as
high as INR 50,000 or even more. Thus, taking revenue as the basis may give absurd conclusions
as regards the strength of their network. To explain with the help of an illustration, consider that,
for a given time period, 1000 room nights are booked through a hypothetical OTA X where each
room night is priced at INR 500 and 50 room nights are booked through another hypothetical
OTA Y where each room night is priced at INR 10000. The gross booking value (GBV), which has
been suggested by MMT-Go as the more appropriate metric, made by OTA X and OTA Y for the
said time period would be equal (i.e., 500000), thus showing equal market strength based on
market shares, despite OTA X having intermediated bookings for 1000 room nights as compared
to 50 room nights booked through OTA Y. This, to the Commission's mind, grossly
underestimates the network created by OTA X through a large volume of transactions which was
20 times the transactions intermediated through OTA Y. In the case of an OTA, the user-groups
are linked by the presence of positive indirect network effects. In the present case, both hotels
and consumers positively value the presence of more users on the other side of the platform, as it
creates higher visibility and potential sales (for hotels) and wider variety and options (for
consumers). Further, these user sides also benefit the OTAs in monetising the user attention in
form of various other verticals e.g., most of these OTAs also have verticals in the form of flight
bookings, trains and bus bookings, package deals, alternative accommodations etc., besides
opportunities to earn revenue through targeted advertisements. Towards that end, OTAs also
benefit from those consumers who visit their portal, reveal their search preferences and leave it
without consummating that particular transaction. Even if the consumer does not consummate
that transaction, to say that it is a loss for an OTA is to undermine the value of data in the form
of revealed consumer preferences which is monetisable through other verticals and targeted
advertisement. Thus, the Commission finds that from the data available at record, stayed RNs
may provide the most appropriate metric to gauge the comparative strength of MMT-Go based on
markets shares.
226. The following table [Table 15] from the Investigation Report of the DG calculates the
market shares on the basis of number of room night booked through the OTA on the basis of
information provided by respective OTAs:
-----------------------------------------------------------------------------------------------------------------------------------------------------------
227. From the aforesaid table, it is observed that while MMT-Go's market share has increased
consistently during the period under investigation, except a slight decline in 2019-2020
from to . However, the same was above during 2017-2018,
2018-2019 and 2019-2020. Booking.com which has been stated by MMT-Go to be posing
significant competitive constraints to it became marginalised after 2016-2017. The decline in the
market share of Booking.com was matched by a commensurate increase in MMT-Go's market
share during 2017-2018 and 2018-2019. Further, market shares of other competitors such as
Expedia, Yatra and Cleartrip were visibly below 10% and were on a decline during the period
under scrutiny. Further, market shares of new entrants such as Easemytrip and Paytm was below
1% during the period under scrutiny. Considering the comparative market shares, it appears very
unlikely that any of these players were posing any effective competitive constraints on MMT-Go in
the relevant market. Further, the comparative assessment presented by FabHotels showing
stayed RNs booked through Yatra and Cleartrip as a percentage of those booked through MMT-Go
supports this conclusion.
228. The Commission is fully cognizant that market share is only one of the indicators
enshrined in Section 19(4) of the Act for assessing dominance, and the same cannot be seen in
isolation to give a conclusive finding. Further, this assumes all the more importance in case of
platform/digital markets, where high market shares may not be durable and where the platforms
derive their strength from factors other than market shares. However, in the present case, none
of those other factors are presenting any different conclusion with regard to the strength of MMT-
Go in the relevant market.
229. Dependence of consumers on the enterprise is an important parameter under Section 19
(4) to gauge the strength of an enterprise. For the purposes of the present discussion, MMT-Go is
primarily intermediating between two distinct user groups who are both in some sense the
consumers of the services offered by MMT-Go. Both hotels and consumers positively value the
presence of more users on the other side of the platform, as it creates higher visibility and
potential sales (for hotels) and wider variety and options (for consumers). While delineating the
relevant product market, the Commission has already elaborated in details on the dependence of
hotels on the OTAs. Given that MMT-Go was the biggest OTA having the highest market share
during the period under investigation, the dependence of hotel side on MMT-Go for their survival
and growth, requires no further elaboration.
230. The Commission further notes that the barriers to entry and expansion also informs the
state of competitiveness in a market. As is apparent from the facts before us, the last entry in the
market was in 2017 by HappyEasyGo. Apparently, its market share was merely 0.2% in 2019-
2020 of the aggregate stayed RNs in the OTA segment. Thereafter, despite the market size
growing manifold, there has not been a new entry. While MMT-Go has argued that the publicly
available information indicates that Google plans to enter the OTA market and compete directly
with OTAs, this factor may not be relevant in respect of the period under investigation/inquiry.
231. Network effects play a pivotal role in dominance assessment. As the DG has pointed out,
MMT-Go has more than 45,000 properties listed on its platform. Due to such wide choice available
-----------------------------------------------------------------------------------------------------------------------------------------------------------
on MMT-Go's portal, consumers also prefer MMT-Go to other portals, which in turn incentivises
hotels/franchisee service providers to list on it. Further, MMT-Go offers several benefits and
features, which coupled with its market position has resulted in network effects. In the kind of
market under consideration, such network effects also create insurmountable entry barriers for
existing as well as potential market participants.
232. Besides the aforesaid factors, the Commission agrees with the assertion made by the
Informants that the commercial arrangement between MMT and OYO has further fortified the
position of MMT-Go in the market. Such commercial arrangement resulted in the fact that a large
number of consumers also book hotels on the said website which then leads to a great influx of
hotel owners who are willing to list their hotels on MMT-Go.
233. In view of the foregoing, thus, the Commission concludes that MMT-Go held a dominant
position in the market for online intermediation services for booking of hotels in India during the
period of inquiry, i.e. 2017-2020.
Abuse of Dominant Position
234. The Commission observes that the Informants have alleged various practices/conduct on
the part of MMT-Go which have been termed to be abusive. Some of these were prima facie found
to be abusive and the Commission had asked the DG to investigate the same. The DG has
returned a finding of contravention specifically with regard to parity obligations (price parity as
well as room parity), predation, misrepresentation and exclusivity conditions (D minus 5
restriction) to be abusive on the part of MMT-Go. In addition, the commercial arrangement
between MMT-Go and OYO, vide which MMT-Go delisted the competitors of OYO (FabHotels and
Treebo) from its portals was also found to be in contravention of Section 3(4) read with Section 3
(1) of the Act. The Commission will deal with each of these allegations in the following part of
this order.
Parity Obligations [Price/Rate Parity and Room Availability Parity]
235. The Commission, in its prima facie order, had noted that the Across Platform Parity
Agreements (APPAs), popularly referred to as ‘retail Most-Favoured Nation (MFN) clauses’, are
stipulations where the sellers guarantee an online selling platform terms, price and/or non-price,
that are at least as favourable as those granted to any other platform, thus ensuring the former a
competitive advantage over its competitors. By securing such favourable terms, the platforms
attempt to guarantee the best available price and/or terms for a given product to its final
consumers.
236. The Commission also noted that APPAs may result in removal of the incentive for
platforms to compete on commissions they charge from hoteliers, may inflate the commissions
and the final prices paid to the consumers and may also prevent entry of new low-cost platforms.
Though the magnitude of the anti-competitive effects of these agreements, inter alia, will depend
on the market power of the platform, given the prima facie dominance of MMT-Go, such parity
restriction was directed to be investigated to gauge its impact under Section 3(4) as well as
Section 4 of the Act.
237. The DG has investigated the relevant clauses of agreement dated between
MMT and FabHotels and also the agreement dated between MMT-Go and Treebo. Both
the agreements contained clauses which required these franchisors to ensure that there
shall
238. The DG reviewed the cases in other matured jurisdicitons on price parity impositions and
found that internationally wide rate parity arrangements are considered to be anticompetitive.
The DG then examined the agreements of different OTAs with hotel partners and observed that
all the OTAs were imposing similar conditions on their hotel partners. The investigation revealed
that while Booking.com, Agoda, Expedia and Cleartrip has imposed room as well as rate parity,
other OTAs such as Yatra, EaseMyTrip and Paytm has imposed only rate parity. Further, OTAs like
Yatra have included penal provisions for non-compliance.
239. The DG also sought information from certain hotels and observed that out of 21
respondent hotels, seven hotels had submitted that price parity affect their business adversely.
The reasons cited by hotels include adverse effect on offline rate and erosion of customer base. It
was also stated that rate parity reduces competition between OTAs and the practices of OTAs of
giving deep discounts after maintaining price parity was affecting hotel's direct bookings.
Further, the DG observed that the said abusive act of MMT-Go not only created barriers to new
entrants in the market but also drove existing competitors out of the market. The DG noted that
Paytm first launched the hotel booking services in 2016, but these services were then shut down
-----------------------------------------------------------------------------------------------------------------------------------------------------------
and relaunched in April 2019. Further, HappyEasyGo entered the travel industry in 2017. Further,
imposition of rate parity and deep discounting practices of MMT-Go was found to be affecting
global players like Expedia and Booking.com, as was evident from their declining market shares.
In view of the above, the DG is of the view that the imposition of the parity clause by MMT-Go is
in contravention of the provisions of Section 4(2)(a)(i) of the Act.
240. During the hearing, MMT-Go objected to the findings of the DG. It was argued that these
clauses are not impositions and the hotels are only required to put in their best efforts to
maintain price and room parity. It was also submitted that these clauses are widely accepted
industry norm forming part of the commercial arrangement between every OTA and the hotels.
Further, it was averred that these clauses were never implemented strictly as MMT-Go had no
mechanism to monitor even if the hotels deviated from their contractually agreed terms. Further,
it was stated that the DG has not shown any impact of these clauses, and the DG's finding that
parity obligations resulted in entry barriers was unsubstantiated. MMT-Go further submitted that
parity obligations were objectively justified given price sensitivity of the Indian consumer and to
prevent free riding. Lastly, it was argued that given that all other OTAs are also having similar
commitments from the hotels, regulatory intervention aimed only at MMT-Go would not address
the competition concerns identified by the Commission.
241. Treebo stated that the price parity imposed by MMT-Go on Treebo prevented it from
offering lower prices to any other OTA. If some other OTAs such as Cleartrip, Yatra, etc. had
better prices than MMT-Go for Treebo properties, they could have generated more business for
Treebo since customers look for best prices available on various channels but MMT-Go's price
parity restriction didn't allow it to offers lower prices to anyone else. FabHotels submitted that
OTAs such as Yatra, Expedia, Booking.com, Agoda, Easemytrip and Cleartrip have also imposed
price/room parity on FabHotels and that MMT-Go took advantage of the pervasive wide MFN
network and offered discounts on properties listed on MMT-Go portals, that other OTAs did not
have the ability to match. MMT-Go enforced contractual wide parity obligations prior to
the as well as under the . In support of this, FabHotels has provided
certain emails and WhatsApp correspondence. MMT implemented rate and price parity since 2015
when FabHotels and MMT first entered into standard click wrap agreement.
242. Further, FabHotels stated that in the relevant market, given the price conscious nature of
Indian consumers, bookings for budget room accommodation would be driven by price
consideration and given MMT-Go's ability to offer discounts that other OTAs could not, multi-
homing had/would have negligible constraints on MMT-Go's market behaviour. In fact, with the
room parity obligation cast on FabHotels and with MMT-Go's ability to incur high marketing and
advertising expenses, multi-homing by consumers looking for budget hotel rooms would have
reduced significantly.
243. FabHotels submitted that there are no objective justifications for imposing wide MFN
obligations. While free-riding may be argued as a justification for imposing narrow MFN, where
MMT-Go restricts FabHotels from offering better terms directly, free-riding cannot justify wide
MFN that applies to all forms of distribution channels.
244. Mr. Deep Kalra, Founder and Group Executive Chairman of MMT-Go, has admitted that
MMT-Go imposes price parity. As per him, price parity clause in the agreement basically ensures
that a hotel does not quote a lower price on any other platform. This is done to protect the
interest of consumers. While MMT-Go stated that it doesn't have the resources to monitor parity
on a day-to-day basis, but, evidences (emails and Whatsapp messages) provided by FabHotels
clearly show that MMT-Go not only monitors the price parity strictly but also ensures that price
parity is maintained. FHRAI in its information has also submitted an
email asking the hotel to remove the rate disparity with respect to
competitors of MMT-Go, otherwise the visibility of the property would be reduced.
245. On an overall appreciation of the aforesaid submissions, the Commission notes that there
is no disagreement between the parties as regards the existence of such obligations in the
agreements between MMT-Go and the chain hotels/franchisors (Treebo and FabHotels). Rather,
MMT-Go has sought to provide objective justifications for having such clauses in its agreement
with hotel partners and franchisors. The Commission observes that the wide rate parity
impositions, whereby the hotel partners are restrained from offering better prices to other OTAs
or to offer any better prices on their own websites, are generally perceived as anti-competitive
because of their ability to restrict price competition and, thus, making it difficult for an entrant or
an existing player to establish a market presence, thereby creating entry/expansion barrier for
-----------------------------------------------------------------------------------------------------------------------------------------------------------
new/other platforms due to the supplier's price parity clause with an incumbent platform. Hence,
there would be little incentive for sellers to secure a lower commission if it cannot be used to
drive competition, thereby resulting in foreclosure of competition. It can also reduce incentives
for OTAs to compete with others by offering lower commission rates, in return for a better rate
per room night, thereby softening price competition between platforms and decreasing
innovation.
246. For the aforesaid reasons, parity arrangements in case of the online booking platforms
market have been a focus of several antitrust investigations across the globe. At the outset,
based on a general appreciation of the international jurisprudence and economic literature, it is
noted that room rate parity can be either wide or narrow. Platform MFNs are labelled “wide” if
they constrain the price on all other platforms, including the provider's own website (if any). In
contrast, platform MFNs are considered “narrow” if they prevent the provider from setting a lower
price on its own website, while leaving prices on other platforms unrestricted. Wide rate parity is
the more restrictive form of parity agreement. In such clauses, a hotel agrees not to undercut the
room prices that the OTA charges for their hotel. This agreement generally applies to all
distribution channels, including other OTAs and the hotel's own website. Narrow rate parity
clauses generally allow hotels to offer lower rates to other OTAs, but not publicly online through
their own websites. Narrow rate parity clauses also generally do not restrict a hotel from offering
lower direct rates when it's through indirect or offline channels, such as email or telephone
bookings, or to guests in their loyalty programs. Sellers are, permitted to offer better prices and
terms to competing platforms. Thus, the difference between narrow and wide parity clauses is in
the scope, i.e., the scope of coverage in wide parity clauses are broader than the scope of
coverage in narrow parity clauses.
247. What is perplexing in the present case is that the rate parity is not the only clause that
exists in the agreements which are before this Commission for examination. Such parity
obligation exists in conjunction with room parity obligations, deep discounting strategies and
exclusivity conditions. Thus, any examination of these clauses sequentially will be bereft of the
simultaneous, and reinforcing, impact they create or can potentially create on the overall
competition in the market.
248. Presence on OTAs is essential. MMT-Go is a dominant platform and an important gateway
for hotels to reach end consumers. Thus, the hotels do not have a real choice to leave this OTA
and be present on other OTAs. Even if all OTAs impose these parity obligations, the impact
caused because of such obligation may vary from OTA to OTA. As a matter of fact, the DG has
found that all OTAs were imposing rate parity, while some were imposing both rate parity as well
as room parity.
249. Rate parity obligation in favour of MMT-Go meant that a hotel will not be able to supply
its room night to any other OTA at a price lesser than the price offered to MMT-Go. Room parity in
favour of MMT-Go ensured that at any given point of time, the hotels rooms offered for sale at
MMT-Go would not be lesser than any other OTA. In order to understand the impact of such
stipulations, it is necessary to identify the harm being caused, in light of the objective
justification, if any exists.
250. It may be worthwhile to understand the impact with the help of an illustration. Consider
that Hotel A is listed on all OTAs and decides to supply a room night to MMT-Go at Rs. 1000 per
night. Now, Hotel A will not be able to supply the room night at a price lower than Rs. 1000 per
night to any other OTA. Considering that MMT-Go charges a commission of 20% from Hotel A on
every room night sold through MMT-Go's portal, Hotel A will get Rs. 800 per room night sold
while MMT-Go will keep Rs. 200 per night.
251. In case of price parity obligations, the foremost theory of harm is that no existing or
potential OTA will have an incentive to offer a commission lesser than 20% to Hotel A as such
lower commission will not secure them a room night from Hotel A at a price lower than Rs. 1000
per night. Thus, while (at least hypothetically) Hotel A could have benefitted in the form of
contracting a lower commission with another competing OTA by supplying its hotel room for a
price lesser than Rs. 1000 per night, it will not be able to do so because of the price parity
obligation imposed by MMT-Go. Hence, it will reduce incentives for other OTAs to compete with
MMT-Go by offering lower commission rates, in return for a better rate per room night, thereby
softening price competition between OTAs and decreasing innovation. This, to an extent, can be
correlated with the data collected by the DG. The DG, while looking at the allegation of excessive
commissions concluded that the commission charged by MMT-Go was found to be commensurate
-----------------------------------------------------------------------------------------------------------------------------------------------------------
with the industry practice and hence, the same may not be termed as excessive. While the
Commission is not going into the determination of the commission charged by MMT-Go being
excessive, as the same has also not been found by the DG either, it cannot be completely ruled
out that such industry practice was the result of softening of competition between OTAs pursuant
to the operation of rate parity obligations.
252. Another harm which is apparent is that even if all OTAs secure the rate parity obligation
from Hotel A, the one having maximum capability to fund discounts may end up intermediating
the maximum bookings. In the instant case, rate/price parity is applied at the time of listing and
further discounts and cash backs are provided on it by the OTA. Room availability parity, in
addition, would imply that even the last unsold room, intended to be sold through OTA platforms
should be reflected on all the OTAs which have room parity impositions in their agreements with
hotels. Thus, even if all OTAs have secured rate parity and room parity from Hotel A, the OTA
offering maximum discounts, may end up selling most room nights of Hotel A. Thus, even if other
OTAs charge a commission lesser than 20% (the commission rate which is being charged by MMT
-Go), such OTAs may neither benefit in terms of securing a better rate/price per room night (than
Rs. 1000 per night) from Hotel A, nor be able to sell any rooms nights because even the last
room night will be sold through the lowest price OTA i.e., MMT-Go in the present scenario.
253. Further, because all room nights will be sold through the dominant platform, Hotel A will
have to pay the highest commission (i.e., 20%) for each room night sold, despite having
contracted a lower commission rate with other OTAs, which in turn would imply an overall
increase in the price of per room night for the end-consumer. To put it differently, there would be
little incentive for Hotel A to secure a lower commission if it cannot be used to drive competition,
thereby resulting in foreclosure of competition. Further, it may not matter even if other OTAs
agree for lesser commission rates because commission is payable on intermediation of room
bookings and since most rooms would be sold through the OTA that has the ability to discount
the most, Hotel A will end up paying the highest commission on all room nights booked.
254. In the context of the present case, thus, what has happened is that the collective
operation of these clauses and strategies on the part of MMT-Go have created an ecosystem
which is self-driven to strengthen the position of MMT-Go, despite other OTAs also imposing some
of these clauses/restriction through their agreements with hotels. Further, the presence of room
availability clause ensures that, any hotel which wants to list its property on MMT-Go has to
ensure that there shall be no difference in the availability of rooms of the Hotels provided to MMT-
Go and other OTAs (“Room Availability Parity”), even if they are getting better terms and
conditions from any other OTA. This may have the impact of reducing the competition between
the OTAs to prevail merely in terms of the ability to offer discounts to the final consumers. And
further because most of the bookings will be made through the dominant platform (which is also
charging the highest commissions), this platform may also be most capable to fund those
discounts through the commission's earned. This will further make it more attractive to end-
consumers as compared to its rival OTAs leading to more bookings through it and more
commissions to fund more discounts. This loop is vicious and can lead to foreclosure of
competition for other OTAs.
255. Thus, it becomes pertinent to examine the combined effect of these clauses in presence
of deep discounting along with commissions charged by the OTAs in the relevant market. Further,
it has to be appreciated that deep discounting practices introduced to attract new customers, to
bring about a shift in consumer behaviour in a new market, or by a new entrant to sustain itself
in an entrenched market to enable it to keep afloat, cannot be seen in the same coin as is done
by an entity which has significant market power and which is eyeing to oust competition from the
market. Thus, the nature of the deep discounting, the market, the period for which it is in vogue
may also be relevant.
256. Further, given that other OTAs were losing out to MMT-Go (e.g., the dominance
assessment showed that decline in the market share of Booking.com was matched by a
commensurate increase in MMT-Go's market share during 2017-2018 and 2018-19), the most
rational response in a competitive market situation on the part of the other OTAs would be to
offer a lower commission to the hotel partners and secure a lower room rate per night. But
because of the rate parity obligation, there was no incentive for OTAs to compete with
competitors by offering lower commission rates, in return for a better rate per room night. Thus,
the harm theorised in literature is evident from the data available before the Commission.
257. Another important result which is evident from the data is that MMT-Go offered the
-----------------------------------------------------------------------------------------------------------------------------------------------------------
highest discounts to the end-consumers. Without going into the question of how these discounts
were funded, as discounts per se or of itself may not be an antitrust concern, it is important to
see the impact such discounts may create in conjunction with other surrounding stipulations. The
theory suggests, and MMT-Go also confirmed, that these discounts are funded from the higher
commissions secured by MMT-Go from the hotel partners. The impact of such higher commissions
in the long run would be the higher capability to fund discounts over the rate at which the room
nights will be supplied to all OTAs (as well as directly sold through own website) which in turn
will ensure that most room nights would be sold through MMT-Go (which is also evident from its
market share based on stayed room nights as collected by the DG during investigation). Since
most room nights will be sold through MMT-Go that charges a high commission, the room rates at
which room nights will be supplied by the hotels will converge towards an overall high price in
the long run.
258. In the counterfactual scenario, consider that there was no price parity obligation on Hotel
A. In the absence of price parity clause, Hotel A would have been free to adjust the price for each
OTA and for its own direct sales, based on the cost of selling through those channels (i.e.,
commission charged by each OTA). Hence, given that the platforms' commission rates are higher
than Hotels A's cost of selling directly, the price would have been higher for intermediated sales
than for direct sales. When the OTAs/platforms impose price parity clause, Hotel A is constrained
to charge the same price in all channels, which, all else being equal, increases Hotel A's average
cost of distributing the product (as its ability to freely decide the supply cost for each OTA based
on the commission charged by them is now lost). Further, had there been effective competition
between the OTAs (which is already compromised given that MMT-Go is a dominant OTA), it
would have been possible for Hotel A to delist itself from MMT-Go without losing considerably in
terms of OTA sales and visibility (and discoverability). Had Hotel A had the option to deviate and
be active on another OTA instead of MMT-Go, it would have acted as a check on MMT-Go's
dominance and conduct, which in the present facts and circumstances is severely compromised.
259. Thus, the pricing strategy of MMT-Go allows it to list hotel rooms at discounted rates, as
may be determined unilaterally by itself, while it takes away the freedom of differential pricing
from its hotel partners, thereby limiting the possibility for them to offer their inventory at
discounted rates through alternate channels/platforms based on other commercial considerations.
Parallelly, the room parity condition restricts them from providing differential availability of rooms
of the hotels to other OTAs/alternate portals including to such OTAs that charge lower
commission rates or have unmet demand at a given point in time. Resultantly, the hotels are
made to relinquish their price-setting freedom on the MMT-Go platform, which decides the final
price payable by consumers after discount on its platform, and also on all other
platforms/channels through the price parity condition. This, in combination with the room parity
clause, effectively prevents the hotel partners from implementing independent yield management
strategies for their time-limited room inventories. This is unambiguously unfair given that the
hotels bear the sales risk and price-setting ability is central to freedom of trade and fair
competition.
260. MMT-Go has argued that it is practically impossible to monitor parity on a day-to-day
basis and that it has neither the means nor the resources to monitor the prices or the inventories
offered by the hotels/accommodations across the competing distribution channels. However,
evidences (emails and WhatsApp messages) provided by FabHotels clearly show that MMT-Go not
only monitors the price parity strictly but also ensures that price parity is maintained. In this
regard, FHRAI in its information has also submitted asking the
hotel to take corrective action and remove the rate disparity with respect to competitors of MMT-
Go. He also threatened that the visibility of the property would be reduced if there is continuous
disparity in rate and inventory with respect to competitors of MMT-Go. Further, MMT-Go has
claimed that the DG has relied upon few instances to establish implementation of these clauses.
In this regard, the Commission notes the submissions made by the Informants that the non-
implementation of these clauses strictly could have been on account of the caution exercised by
MMT-Go, considering the initiation of the investigation.
261. Further, the Commission notes that the DG has also found the restriction laid in Clause
2.1 of the ‘Exclusivity Agreement’ between MMT-Go and certain Chain Hotels like denied their
hotel partners an opportunity to list on other platforms/OTAs especially Booking.com and Paytm
during the busiest booking periods. The DG had concluded that such restriction had the impact of
increasing the dependence of chain hotels on MMT-Go, thereby increasing the revenue of MMT-Go
-----------------------------------------------------------------------------------------------------------------------------------------------------------
that will have adversely affected the business of the competitors of MMT-Go. Further, the
imposition of D-Minus clause by MMT-Go also restricted the option of Chain Hotels to list their
hotel partners on other OTAs, and hence, restricted Chain Hotels to generate revenue from other
OTAs. Further, the said exclusivity condition was not only eliminating competition in the relevant
market of intermediary services for online hotel booking in India, it was also found to be
restricting consumer choice by restricting their ability to book the hotels from other OTA portals.
In view of same, the DG found that the imposition of D minus clauses on the chain hotels
amounted to violation of Section 4(2)(a)(i) and 4(2)(c) read with Sec 4(1) of the Act. The
Commission is of the view that the exclusivity condition along with the parity obligations and
deep discounting worked in coherence which accentuated the adverse impact created in the
market.
262. Based on the foregoing, the Commission finds that the deep discounts, exclusivity
condition and parity conditions, in conjunction, creates an ecosystem that reinforces MMT-Go's
dominant position in the relevant market. Firstly, it helps MMT-Go to retain and further increase
its network of users/travelers, who would increasingly use the platform for availing the best
deals. Secondly, it impedes the competitive process between OTAs by limiting the competitive
levers/instruments at the disposal of other portals who, for instance, cannot get better prices
from hotels by offering lower commission rates. Thirdly, the consequent adverse effect on sale of
rooms through other platforms/channels and their user bases, further accentuates the
dependence of hotels on MMT-Go as well as the bargaining power imbalance that already exists
between MMT-Go and its hotel partners. Fourthly, the increased sales through MMT-Go may lead
to unilaterally determined higher commissions charged by it, giving it the ability to also pass on
discounts which are funded through these commissions, which may adversely impact the prices
at which the hotels rooms are being offered to end-consumers. While it may be argued that
discounts are beneficial for the end-consumers, the net impact may be adverse when seen in
light of higher commissions funding the higher discounts leading to overall higher prices on
which the discounts are applied.
263. Parity terms imposed by MMT-Go cannot be justified on the ground that it is purportedly
an ‘industry practice’. It is important to appreciate that the effect and implications of a conduct
indulged in by a dominant platform on its users and competition in the relevant market is
fundamentally different from when a smaller insignificant player does it. MMT-Go being the
largest OTA in the relevant market, presence on it is essential for hotels to access online
customers for both sale and discoverability. Thus, while a hotel can choose to be on other smaller
platforms based on the terms of contracts they offer, the same is not possible with MMT-Go.
Hotels, especially budget hotels with no brand recognition, have to either accept the terms that
MMT-Go offers or forego significant online opportunity of sale and discoverability. Moreover, while
the other OTAs' may indeed have parity condition in their contracts, it is noted that the discounts
they offer are not comparable to what is offered by MMT-Go. The data on room nights on which
discounts are provided indicates that largest number of room nights on which more than 30%
discount is provided are booked through MMT-Go. Expedia has submitted that average discount
provided by Expedia from 2013-2019 was on an average below 5%. The Expedia funded
discounts are offered from time to time for short periods on specific websites to drive booking
conversion. PayTM submitted that it did not provide discounts to users for hotels but instead
provides cashback incentives into their PayTM accounts within 24-48 hours. Thus, comparing the
combined effect that deep discounting and parity together have, when imposed by a dominant
platform that has already reaped the benefits of network effects in its favour, with that of the
parity conditions of other platforms is not a like-to-like comparison.
264. MMT-Go claims the parity condition to be driven by the need to address free riding
concerns. The Commission is of the view that the potential free riding problem does not have any
perceptible relevance in the presence of the discounts that MMT-Go offers over and above the rate
at which a hotel lists its rooms. When looked at in light of the deep discounts that MMT-Go has
been offering over the years (as the data on record bring out clearly), it does not appear to be a
realistic possibility that a user would discover a hotel on MMT-Go and then book it through
another channel/OTA at a higher price point. It is MMT-Go's own submission that discounts were
provided to build network. Thus, through its discounting strategy MMT-Go ensured both user
footfalls and conversions on its platform. Further, when hotels have more OTA choices, the
increased competition between the OTAs may lower fees/commission paid to hotels, so
consumers may not have as much incentive to free ride. Moreover, what emerged from the cases
-----------------------------------------------------------------------------------------------------------------------------------------------------------
dealt by other authorities, it has been observed that there may not be any concern about the
effect of free riding on incentives to invest (in case of OTAs) because the investments of the
platform are not “specific” to a particular hotel - thus, if there is free riding on the part of a
particular hotel, this does not undermine the incentive of the platform to invest overall.3 Be that
as it may, the Commission finds some merit in the finding of the DG that the narrow price parity
clauses may be justifiable on the grounds of free riding problem. Hotels and OTA are in a
contractual relationship and therefore, free riding of hotels on the investment made by OTAs in
advertisement and promotion can be detrimental to the business of OTAs. However, wide price
parity obligation is not justifiable as it reduces the competition between the OTAs and may have
an adverse impact on prices charged to end-consumers.
265. For the aforesaid reasons, the Commission is of the view that the wide parity obligations
imposed by MMT-Go, along with exclusivity conditions, are in contravention of the provisions of
Section 4(2)(a)(i) and 4(2)(c) read with Section 4(1) of the Act.
Predation
266. The next allegation that needs examination is with regard to predatory pricing. The
Informants had alleged that MMT-Go offer deep discounts on hotel rooms and provide rooms at
prices which are impossible for the hotels to themselves offer, thereby eliminating competition,
as well as tarnishing the reputation of the hotels. The Commission in its prima facie order dated
28.10.2019 observed that deep discounts are often offered in platform markets to establish
network effects. The Commission, however, further observed that since MMT-Go has been prima
facie found to be in a dominant position in the relevant market and have been in business since
the year 2000, such practice may not be introductory and solely aimed at building the network.
This issue was thus directed to be investigated.
267. While investigating this issue, the DG looked at the various costs incurred by MMT-Go
and the revenue earned by it, so as to ascertain whether the average variable costs of MMT-Go in
the online hotel intermediation segment was covered by the revenue earned by it in the same
segment. The DG noted that expenses incurred by MMT-Go in relation to the bookings mainly
include payment gateway costs, call centre costs, personnel costs, brand and other platform level
marketing costs and other fixed costs, losses incurred by MMT-Go for hotel dishonoured bookings,
losses incurred for compensating unsatisfied consumers, etc. In addition to these expenses, MMT-
Go also provides various types of discounts to the customers such as to e-coupon, cash back to
card offered and used by consumer for booking hotels/accommodations. The DG collected the
financial data from MMT-Go including audited financials and trial balance for the FY 2015-2016 to
2020-2021 and recast it to arrive at average variable cost. Based on this, the DG found that the
average room revenue is less than the average variable cost during the period under
investigation. During the said period, MMT-Go was found to have incurred a net variable loss on
per room night basis. Moreover, the DG noted that MMT-Go has been in business since the year
2000 and hence was of the view that this practice may not be introductory or aiming at building
the network. The DG also observed MMT-Go's argument that its discounts (and final sell rates to
customers) have no impact on the amount paid to the hotel as the latter solely depends on the
Best Available Rates (‘BAR’) and the commission agreed (and the discounts are borne solely by
MMT-Go). However, from the responses of the hotels collected by the DG showed a negative
effect of promotions in the form of discounts and cash backs on their business. The hotels
claimed that they had to incur losses in the form of loss of future revenue from their own
online/offline business at those basic rates and they were also having difficulty in maintaining
price parity and the discounted rates were also leading to harm to reputation. Further, though
MMT-Go has stated that the hotels had the option to exercise the ‘Do Not Discount’ (DND) option,
some hotels specified the difficulty in exercising the DND option. The DG also observed that
global OTAs like Expedia and Booking.com were not engaged into discounting practices.
268. The DG also noted that MMT-Go's decision to restrict its main competitors via exclusive
agreement with OYO and the earlier exclusive agreements with FabHotels and Treebo, shows its
intention to limit competition. MMT's ability to offer rates below the average room rate is likely to
further drive out other OTAs. The DG also took note of the submissions of the third parties, i.e.,
other OTAs (Cleartrip and Booking.com) that MMT-Go held a prominent position in the market
because of its discounting practices. Based on all these facts and submissions, the DG concluded
that MMT-Go has engaged in deep discounting and predatory pricing thereby contravening
Section 4(2)(a)(ii) of the Act in the relevant market for intermediary services for online hotel
booking in India.
-----------------------------------------------------------------------------------------------------------------------------------------------------------
269. MMT-Go criticised the assessment made by the DG. Relying on its Expert Economist
Report, MMT-Go has stated that certain cost items which the DG has treated as variable are
considered as fixed in nature by MMT-Go, either because they are not incurred at the transaction
level or are investments made by the company to acquire customers. These include, for example,
expenses for customer loyalty program, and other platform marketing and administrative
expenses and is of the view that certain cost items under ‘other direct cost’ which should not be
apportioned between the hotels and packages businesses has also been considered. For example,
certain ‘advertising and business promotion expenses ‘accrue entirely to the hotel business while
certain ‘direct costs’’ accrue only to the packages business. The DG has apportioned all these
costs under ‘other direct cost’ between hotels and packages. It has also updated the calculations
of the MMT-Go's contribution margin and resultantly shown that average room revenue is more
than the average variable cost based on the assumption by considering some costs as fixed that
have been considered as variable by DG based on the working of outside agency. In the Expert
Economist Report, it has been stated that the DG is inconsistent in its treatment of certain cost
items between MMT and GoIbibo and has labelled some cost items as fixed for MMT and variable
for GoIbibo. The revenues and costs in the DG's calculations are inconsistent with the number of
room nights considered for calculating revenue and variable cost per room night. While revenues
and costs correspond to the overall hotel business (including international hotels), the room
nights correspond to the domestic hotels business only.
270. MMT-Go vide its submissions dated 29.07.2022 has also argued that the DG's analysis is
devoid of any discussion on the intent of MMT-Go to drive out competitors through predatory
pricing and that the DG has relied upon the exclusivity agreements entered by MMT-Go with
FabHotels and Treebo, for a limited period, to conclude MMT-Go's intention to limit competition.
It is submitted that the intent of discounts and incentivisation has always been customer
acquisition and market creation and that the issue of deep discounting has been erroneously
combined with predatory pricing for analysis. Moreover, the DG has discussed the impact of MMT-
Go's discounting strategies not on the other OTAs but on the hotel partners. Such an approach is
contrary to the market for intermediary services for online hotel booking in India, as defined by
the DG. Nevertheless, MMT-Go submitted that the discounts offered by MMT-Go were only aimed
at developing the market for online hotel booking in India and only contributed to the growth of
its hotel partners. Further, it was argued that given the nascent two-sided nature of the market
and the large disruptions it has seen, negative profit margins indicate additional costs that MMT-
Go has incurred to grow the market.
271. The Commission at the outset clarifies that, though often used together or even
interchangeably in common parlance, deep discounting and predatory pricing are two different
concepts. Predatory pricing, in simplistic terms, is charging of prices below firm's own cost
typically below the average variable cost, while deep discounting implies an unusually large
reduction in price by a retailer and is seen in reference to the maximum retail price (MRP) fixed
by the manufacturer or the prices being generally charged by other retailers. Thus, while
predatory pricing is seen in reference to a firm's cost benchmark, deep discounting is generally
seen in reference to the MRP or retail price. It is possible that a price charged to the end
consumer may be deeply discounted, yet not predatory if it is still above the relevant measure of
cost. As regards the application of competition law, while deep discounting in itself may not
trigger an intervention, the presence of other exclusionary or anti-competitive practices along
with deep discounting may create an ecosystem which are amenable to distorting the level
playing field and, in relation to the present case, the same has already been discussed above
while dealing with the parity obligations. Thus, the Commission's analysis herein is limited to the
observations of the DG and the submissions made by the parties with regard to predatory pricing.
272. The Commission notes the submissions made by MMT-Go that the DG has carried out the
investigation of predatory pricing by simply weighing variable costs against the commission
earned by MMT-Go from the online hotel booking segment. While such an assessment may be
suitable for traditional market cases, such simplistic assessment in platform market cases
overlooks the specificities of such markets, which may require a nuanced assessment. For the
purposes of the present case, MMT-Go is predominantly a two-sided intermediation platform,
which also has presence in other verticals. Such platforms function differently from the traditional
market players. Because of the nature of services they provide, the success of such platforms
depends heavily on network effects. This requires network creation that may entail continuous
investment to attract both sides of the platform to interact and thus, create value for other users
-----------------------------------------------------------------------------------------------------------------------------------------------------------
to join the platform. Though many expenses appear to be variable, if seen strictly from the lens
of traditional market assessment standard. This may be because such expenses are directly
related to the intermediation transactions e.g., cashbacks or discounts offered for booking hotel
room night. While the cashback is associated with the room night booking, it may also help in
building the network as every transaction has a ripple effect through feedback loops. In that
sense, the cashback may also have an element of investment that helps the platform build the
network. Further, in case of such platforms, the profit margins may be negative because
businesses must invest to increase demand. But such lack of profitability does not necessarily
imply predatory pricing. It is also stated that other OTAs are also incurring losses or face heavy
competition as they invest in the growing market. For example, .”
273. In view of the objection raised by MMT-Go, the Commission finds it difficult to determine
the reliability and validity of assumptions on the basis of which cost is categorised in the
Investigation Report. The costs are segmented into variable and fixed without proper
explanations and reasons thereof. The assessment of cost as fixed and variable may be different
from an accounting and tax perspective. Whereas it may be different from an economic
perspective in a competition matter, which may further differ from an industry to industry. The
DG's classification of costs such as on illustrative basis : recruitment expenses, printing and
stationery, bank charges, and interest expense on late payment of statutory dues under common
variable cost is not clear as these do not vary with the number of hotel room nights booked.
Moreover, there is no explanation for treatment of certain costs that are considered as fixed for
MMT but have been taken variable for Goibibo like : electricity, communication, insurance, legal
and professional, repair and maintenance, rates and taxes, and traveling and conveyance etc.
There is insufficient clarity in the DG's average variable cost (AVC) calculation and the
basis/assumptions for such differential treatment of costs in MMT and Go-Ibibo that has been
relied upon by the DG has not been elaborated. Thus, in view of the above, the Commission is
hesitant to accept the simplistic categorisation done by the DG in this matter to arrive at a
finding of predation. In view thereof, the Commission is of the view that the finding of predation,
as given by the DG, is not substantiated by the data and evidence presented in the Investigation
Report.
Misrepresentation of information
274. The next allegation investigated by the DG was with regard to misrepresentation of
information by MMT-Go as regards the hotels/property which were shown as sold out on its
portals while the same were only delisted and may have had available rooms for booking. The
DG, based on the submissions made by the parties and selected hotels, deduced that the hotels
which were shown ‘sold out’ have suffered as these hotels were actually active during this period
and consumers were misled to believe that these hotels are not available which had an adverse
impact on the hotel business by denying them access to e-platforms as well as consumers.
Moreover, as the MMT-Go is dominant player, if any consumer makes any search for a particular
property on MMT-Go's platform and finds it to be sold out, there are very little chance that he/she
will try to find the same property on other OTAs which will not only have adverse impact on the
business of the concerned hotel but it will also restrict consumer's fair choice to choose hotels.
Finally, the DG concluded that by showing such misleading information and creating information
asymmetry in the market, the conduct of MMT-Go has the potential to deny market access to the
concerned hotels.
275. FabHotels submitted that despite termination of the agreements with MMT-Go, MMT-Go
continued to list FabHotels properties on its portals, however, the property has been labelled as
‘sold out’. Thus, if the consumer makes an online search for any of the ‘FabHotels Property’
anywhere in India, consumers will find the selected FabHotels property has been sold out.
Further, Goibibo website redirects the consumer to ‘other similar properties’ which are part of
MMT-Go's inventory thereby taking consumer onto MMT's portal.
276. In relation to this allegation, MMT-Go submitted that if a property is shown to be
unavailable on the MMT-Go platforms on a given date; but is available for booking on a
competing distribution channel, then it adversely affects the customers' perception of the
selection of properties available on the MMT-Go platforms. It is, therefore, in the interest of MMT-
Go, to delist and deactivate all hotels which seek to leave the MMT-Go platforms at the earliest.
MMT-Go further submitted that “sold-out” label is applied to all properties which have not
allocated/blocked inventories on the MMT-Go platforms and sometimes it can be due to technical
glitches. Further, MMT-Go stated that till date more than 2000 hotels have delisted themselves
-----------------------------------------------------------------------------------------------------------------------------------------------------------
from the MMT-Go platforms and only two hotel chains have raised this issue. This demonstrates
that MMT-Go promptly delists properties when requested and does not display ‘sold out’ for
prolonged period. It was further stated that the issue was faced on GoIbibo only due to a
technical difficulty arising out of the manual Search Engine Optimization process followed by
GoIbibo till December 2020. Since MMT and GoIbibo are under the same management, had there
been an intent to misrepresent, the same information would have been displayed on MMT portals
as well.
277. The Commission observes that MMT-Go is a dominant player in the relevant market.
Consumers heavily rely on results being shown on MMT-Go's website and any such
misrepresentation of information on MMT-Go's platform could affect the perspective of the
consumer and may dissuade the consumer from searching on alternative channels for the same
hotel, under the assumption that the hotel is sold out. This could result in lower number of room
bookings of the hotel partner and also reduces the competition among the budget hotels
registered on different OTAs, thereby leading to exclusion of such hotels. Moreover, MMT-Go
being a dominant platform, the act of misrepresentation is also exploitative in nature as regards
such hotels.
278. Before parting with the allegations relating to abuse of dominant position by MMT-Go, the
Commission observes that there were certain other allegations raised by the Informants under
Section 4 of the Act, as regards which the DG has not returned a finding of contravention. The
Commission is also not inclined to deliberate further on those issues, except to the limited extent
as has been dealt by the Commission in this order.
Denial of Market Access (Delisting)
279. As regards the allegations relating to delisting, the Commission at the outset notes that
neither OYO nor MMT-Go have denied having any commercial arrangement/agreement interse
pursuant to which FabHotels and Treebo were delisted from its online portals in June and April
2018, respectively. Rather MMT-Go, pursuant to the interim proceedings before the Commission,
volunteered to relist these hotel chains on its portals which is mentioned in the order dated
13.07.2021 of the Commission. This was done as OYO also submitted that it had no objection to
MMT-Go relisting them on its portals.
280. What then needs to be assessed now is firstly, whether the delisting of these hotel chains
in 2018 was anti-competitive and secondly, if the answer to the first question is in affirmative,
whether the relisting in 2021, pursuant to the intervention of the Commission, was sufficient to
correct the distortion caused because of such conduct/arrangement. Since the second question
depends on the examination of the first one, the Commission will deal with the former issue first.
281. MMT-Go has submitted that the answer to the first question is in ‘negative’ stating that
listing on MMT-Go is not necessary for any hotel/franchisee service provider to grow and sustain.
MMT-Go has placed reliance in this regard upon the growth of FabHotels and Treebo on one hand
and OYO on the other hand, during the period intervening 2016-2018, when the former were
listed on MMT but the latter was not. MMT-Go has argued that while OYO grew exponentially
during this period, FabHotels and Treebo's growth in business, either in terms of inventory or
revenue was nowhere near that of OYO which at that point of time did not have access to OTA
platforms. MMT-Go has also stated that its choosing of OYO over FabHotels and Treebo in 2017-
2018 was a commercial decision which it was forced to take as OYO was an indispensable
business partner and onboarding OYO was conditional upon delisting of FabHotels and Treebo by
MMT-Go. It has also been argued that by excluding FabHotels and Treebo, no discrimination has
been caused as these players are neither comparable nor similarly placed with OYO, given the
vast difference in their inventory base in comparison to that of OYO. Further, claims related to
decline in its Superhero properties was also denied by MMT-Go. Lastly, it has been stated that
this allegation has been investigated by the DG under Section 3(4) of the Act, and thus it was
imperative for the DG to establish appreciable adverse effects on competition (AAEC) in the
market in India, which assessment has not been appropriately done by the DG.
282. OYO has also submitted that MMT-Go platform is not essential for hotels in any market in
India and thus, the contention of FabHotels and Treebo that MMT-Go is an essential facility for
their survival is not made out. It was contended by MMT-Go that majority hotel bookings are still
being done offline by consumers. OYO further submitted that neither FabHotels nor Treebo have
produced any evidence to prove that they were driven out of the market as a result of their
delisting from MMT-Go portal. Further, the data relied upon by the DG shows a consistent
increase in FabHotels' number of live properties post delisting, except in January 2020 which
-----------------------------------------------------------------------------------------------------------------------------------------------------------
could be attributed to the Covid-19 pandemic. Also, there had been no impact on FabHotel's
revenue. Further, any impact of delisting was immediately recovered by
and then increased to a new high . It then decreased only due to pandemic. OYO
further stated that while giving a finding regarding substantial decline in FabHotels room nights'
bookings post desilting, the DG wrongly took into account only the booking received through
OTAs. As regards Treebo also, it was submitted that its revenue initially increased to INR 4.9
Crore in May 2018, from INR 4.6 Crore in April 2018 (i.e., at the time of delisting) and then
marginally decreased till it was INR 3.8 Crore in October 2018. Accordingly, any alleged impact of
delisting was, by Treebo's own data, recovered entirely within 3 months of delisting and new
heights were reached as early as August 2018. The recovery continued with Treebo recording an
increased revenue of INR 6.1 Crore in December 2019. Treebo's revenues continued to climb
absent being listed on MMT-Go's platform and any later reduction in revenue was on account of
the Covid-19 pandemic and not owing to any alleged anti-competitive conduct.
283. OYO has also refuted FabHotels' claim that it was an effective competitor of OYO and
stated that its comparison with FabHotels is misleading as during FYs 2016, 2017 and 2018,
FabHotels' properties were listed on MMT-Go's platforms, while OYO's hotel partners were
delisted. Further, despite being delisted, OYO could grow and flourish during these years, while
the inefficient FabHotels could not effectively compete, even when it was listed on MMT-Go.
Further, it has been submitted that regardless of whether OYO's hotel partners were listed on
MMT-Go's portals or not, its revenue from online bookings continued to be between
out of which of online sales are from OYO's own app (including walk-ins). Further,
OYO has submitted that its relationship with MMT-Go is also not significant, given that it
contributes only of OYO's total revenues and room nights and OYO's share of MMT's
revenues is only .
284. FabHotels and Treebo, on the other hand, have vehemently opposed the arguments of
OYO and MMT-Go. They both have argued that their OTA sales (B2C) were impacted severely
because of delisting from the MMT-Go portals and to survive in the market, they resorted to other
forms of bookings (B2B) like corporate bookings. Further, it was argued that though MMT-Go has
relisted them in 2021 pursuant to Commission's intervention, such listing has not been on fair
and non-discriminatory terms.
285. The Commission has considered the submissions made by the parties on the allegation of
delisting. The DG has found the said conduct anti-competitive under Section 3(4)(d) read with
Section 3(1) of the Act. Section 3(4)(d) of the Act deals with vertical agreements in the nature of
refusal to deal. As defined under Explanation (d) to Section 3(4) of the Act, “refusal to deal”
includes any agreement which restricts, or is likely to restrict, by any method to persons or
classes of persons to whom good are sold or from whom goods are bought.” Further, to establish
a contravention under Section 3(4) read with Section 3(1) of the Act, it is required that the
vertical agreement under scrutiny has caused or is likely to cause an appreciable adverse effect
on competition (AAEC) within India.
286. The Commission has perused the impugned clause from the agreement entered into
between MMT-Go and OYO on (the ‘OYO Agreement’). The said clause in verbatim is
reproduced below:
287. It may also be relevant to see which preceded the aforesaid clause:
288. Apparently, required MMT-Go to ‘cease to list’ any accommodation, directly

or indirectly, by or through FabHotels and Treebo within a particular time frame as provided in
the said clause. As a consequence of this clause, MMT-Go delisted FabHotels and Treebo. At the
relevant time, FabHotels, Treebo and OYO were all providing franchising services to independent
budget hotels who did not possess much brand value of their own and thus, through the co-
branding by these franchisee service providers, these independent budget hotels were able to
benefit from the brand value of these franchisee service providers, while also ensuring a
minimum level of standardized services to these consumers. These franchisee service providers
were listing their hotel partners at OTAs in order to get the latter better visibility, discoverability
and access to the end-consumers. Arguably, the independent budget hotels could also list on
OTAs without being associated with these franchisors. However, getting adequate visibility
-----------------------------------------------------------------------------------------------------------------------------------------------------------
amongst the large pool of hotels available at the OTAs would remain challenging for such
independent budget hotels whose main purpose of associating with OYO, FabHotels or Treebo was
to benefit from their brand recognition. Thus, the franchisee service providers became a gateway
for these independent budget hotels to secure an effective listing/visibility at OTAs, while the
OTAs were acting as gateways to access the end-consumers. Considering the relationship
between OTAs and franchisee service providers, it is not in dispute that they are in a vertical
relationship, whereby hotels were getting access to OTAs, and ultimately access to end-
consumers, through these franchisee service providers. Thus, the impugned Agreement between
OYO and MMT-Go is amenable to the provisions of Section 3(4) of the Act. Further, looking at the
nature and consequence of of the OYO Agreement, it was evidently in the nature of
refusal to deal, qua Treebo and FabHotels, as it required MMT-Go to delist (in other words, not to
deal with) FabHotels and Treebo.
289. During the hearing, several times, MMT-Go impressed upon the Commission that it was
at the receiving end with regard to this contractual obligation to delist FabHotels and Treebo,
which it purportedly stated to have accepted as a condition precedent to have OYO on its
platform. This contention was also used to combat Commission's determination of it being a
dominant player, as also to argue that it cannot be said to have any motive for delisting
hotels/franchisors which are its channel partners and such delisting does not make any
commercial sense, in view of larger inventory leading to greater network effects.
290. At the outset, the Commission observes that Section 3(4) of the Act is neither exhaustive
in nature nor it requires that the impugned restriction is in form of an imposition. The only
requirement, as envisaged under the Act, is that there is an
agreement/arrangement/understanding between vertically related players, which restricts or is
likely to restrict, persons to whom good are sold or from whom goods are bought, which causes
or is likely to cause AAEC. More often than not, this restriction is in the nature of an imposition in
the sense that the party accepting the condition/restriction, pursuant to the market power
exercised by the entity imposing the restriction, has no option but to accept such a condition.
However, the case before the Commission is not of this general category. In the present case,
admittedly, MMT-Go took a commercial decision considering the inventory of budget hotels
available with OYO. Further, looking at the other clauses of the OYO Agreement,
especially , it is apparent that the Agreement was a mutually beneficial arrangement
between MMT-Go and OYO. While MMT-Go agreed to delist two franchisee service providers
(FabHotels and Treebo) which were availing the services of MMT-Go at the relevant time period in
order to reach the end consumers; OYO, seemingly in return, agreed for D-minus clause which
was beneficial to MMT-Go as it helped MMT-Go to deprive the Indian OTAs (namely, Yatra,
Cleartrip, PayTM, EaseMyTrip, Goomo and Via) of the option to list OYO Hotels/Rooms during the
last few days (5 days before the booking day in case of D-minus 5). Thus, there seems to be
mutually beneficial (backed by ample consideration of forbearances on each part) reciprocal
arrangements between MMT-Go and OYO who are vertically related, to foreclose both the markets
for their respective competitors. On one hand the rivals of OYO (FabHotels and Treebo) were
deprived of a dominant OTA for distribution and on the other hand, the competing Indian OTAs of
MMT-Go were ousted for a crucial time period from having OYO branded properties on their
portals for booking.
291. Further, though intent is not relevant for a Section 3(4) assessment, the Commission
observes that a collective reading of Clause 2.1 and 2.2 in light of the surrounding facts and
circumstances that existed at the time when the OYO Agreement was entered into between MMT-
Go and OYO, explains their respective motivations (besides the mutually benefitting nature of the
said arrangement) for entering into this allegedly anti-competitive arrangement. There are
various newspaper reports indicating publicly, a shift of OYO from aggregation model to franchise
model, to reduce its operational costs and improve serviceability. Thus, initially OYO seems to
have started off as an aggregator, providing services somewhat similar to that of MMT-Go.
However, it gradually started to move to a franchisee service provider model, thereby completely
exiting the aggregation model by the end of 2017.4 To say that, such considerations were
coincident and had no bearing on the commercial arrangement between OYO and MMT-Go that
followed in 2018, will be a naïve proposition. However, since such motive is not so relevant for
the antitrust assessment given that no such requirement is envisaged under Section 3(4) of the
Act, the Commission is not inclined to deliberate further on this aspect.
292. The aforementioned discussion establishes that there was an agreement/understanding
-----------------------------------------------------------------------------------------------------------------------------------------------------------
between OYO and MMT-Go which was in the nature of a vertical arrangement amenable to Section
3(4) read with Section 3(1) of the Act. The assessment under the said provisions further requires
establishment of AAEC or likelihood of AAEC. However, before moving to the AAEC assessment,
the Commission notes that during the hearing, OYO has denied being a franchisor (despite
having admitted this as its business model in a prior case dealt by the Commission in 20195 ).
The Commission does not find it necessary to delve into this determination in order to move
further with its assessment of AAEC, as irrespective of the nomenclature or the nature of the
service that it provides, it is in unequivocal terms in a vertical relationship with MMT-Go for the
purposes of present allegation. Further, MMT-Go's argument that FabHotels and Treebo were
neither comparable nor similarly placed with OYO, given the vast difference in their inventory
base seems misplaced. If FabHotels/Treebo were not viewed as competitors by OYO, there would
not have been any reason why OYO would have asked MMT-Go to agree to such a condition.
293. As regards the AAEC, both MMT-Go and OYO have submitted that the DG has not
adequately carried out the AAEC assessment. It has been argued that the presence on OTAs was
not necessary for survival and as such, both FabHotels and Treebo were able to grow despite
delisting and were not ousted from the market which demonstrates that there was no AAEC in
the market.
294. Though these arguments sound very attractive, there are compelling reasons for which
the Commission finds it difficult to accept them. As explained earlier, MMT-Go is primarily a two-
sided market that caters to two distinct group of users, the end-consumers and the hotels. These
hotel partners use the services of franchisee service providers like OYO, FabHotels, Treebo etc. to
reach the end-consumers through the intermediation portals of OTAs, while the end-consumer
use it to search, compare and book hotel rooms. The impugned delisting led to FabHotels and
Treebo being ousted from a dominant OTA, i.e. MMT-Go. Thus, any effect analysis needs to take
into account both these sets of users to gauge the net effects and to ascertain whether, on a rule
of reason analysis, such effects are adverse as well as appreciable.
295. While delineating the relevant product market, the Commission has deliberated in detail
the relevance and necessity for a hotel partner, more so those which have lesser visibility, to be
listed on OTAs. Presence of a hotel or franchisee service provider on an OTA can amplify its
visibility to the other user side, not only directly to the users transacting through an OTA but also
those searching through meta search engines and then booking through modes other than OTAs.
296. Further, the Commission has already found MMT-Go to be 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. Also, the Commission has earlier observed that
the franchisee service providers, namely OYO, Treebo and FabHotels, were important gateways
for the independent hotels to get visibility on the OTAs. Thus, the non-accessibility of a dominant
OTA, i.e. MMT-Go, to FabHotels and Treebo (consequent to delisting) may significantly hamper
not just the online visibility of the Informants i.e. FabHotels and Treebo, but more importantly of
the associated budget hotels that avail of the franchisee services of FabHotels and Treebo. Thus,
MMT-Go being a dominant OTA in the relevant market delineated by the Commission, delisting
from the said portal cannot be said to not have foreclosed an important channel of distribution to
FabHotels, Treebo and those independent budget hotels which were reaching the MMT-Go portals
through them. Further, the argument that FabHotels and Treebo were able to survive and found
alternative channels to sell their inventory post delisting lacks correct understanding of the intent
and purpose of the Act as it completely disregards the impact on the independent budget hotels
which rely on these players to reach the end-consumers through OTAs.
297. The Commission is cast with a duty to ensure healthy and fair competition in the
markets, and not just to ensure survival of players. The survival of players is the means through
which such competition is ensured, promoted and sustained. The explosion of online commerce
has changed the dynamics of consumer preferences and transactions. As a market regulator, it is
thus imperative that the competition regulator ensures that all stakeholders get an opportunity to
compete on merits and get a fair chance to be part of digital commerce. This is more important
because in the absence of fair competition in the online commerce space, the consumers using
such channels to consummate their transaction, both from the buyers' side as well as sellers' side
of the market, will be deprived of the benefits of competition. As discussed earlier in the order
while delineating relevant market, the end-consumers using online channels may not be using
the offline channels while consummating their transaction interchangeably. Further, and more
importantly, the hotel partners use all the distribution channels complementarily and not
-----------------------------------------------------------------------------------------------------------------------------------------------------------
interchangeably. Thus, even if FabHotels and Treebo survived through other modes, like
corporate bookings or offline bookings, this fact alone is not sufficient to outweigh the harm being
caused to the competition on the OTAs. More than the harm to a competitor, the Commission is
more concerned about the harm to the competitive process. Thus, more than the survival of
FabHotels and Treebo, albeit through other means, the Commission cannot be oblivious of the
adverse impact which their exclusion from the OTA channel has caused or is likely to cause to the
competition in the market and the consequently on the consumers.
298. From the perspective of hotel partners, the Commission observes that these independent
budget hotels were tying up with franchisors like FabHotels, Treebo and OYO in order to get
brand recognition which could help them in getting better visibility on OTAs (in terms of better
search ranking, better reviews through improved quality, better consumer handling solutions
etc.). Further, the impugned exclusion has not only affected FabHotels and Treebo branded
hotels, but also those budget hotels which were availing some logistic support (e.g. as in the
Superhero programme) from them, while operating as independent hotels. Such impugned
arrangement between MMT-Go and OYO left these budget hotels with no option but to
disassociate with these franchisees and necessarily engage with OYO, if they wish to avail
franchisee services or any other logistics support from a consumer-recognised franchise chain
inter alia for quality improvement or branding purposes, without losing the visibility of their
properties on the largest online booking platform in the country. This is confirmed from DG's
findings also wherein it was found that as a matter of fact the number of superhero properties
with Treebo quickly declined to zero post delisting. The act of delisting imposed unnecessary
costs of switching on hotel partners who were associated with Treebo or FabHotels to another
franchisee chain such as OYO to enable them to be visible on MMT-Go. This cost was neither
voluntary nor based on incompetence of Treebo or FabHotels but was the result of delisting
attributable to anticompetitive agreement between MMT-Go and OYO. Thus, as the facts appear
before the Commission, the impugned exclusion under the Agreement had the dangerous
likelihood to tilt the franchisee budget hotel downstream market in favour of OYO at the cost of
fair competition. This, in fact, increased the ability and incentive for both market players, i.e.
MMT-Go and OYO, to engage in strategies which could be antithetical to potential competition in
the market. Further, a continued operationalisation of this exclusive agreement could have
compelled all independent hotels seeking franchise services, for improving their brand recognition
and for the purpose of signaling to the consumer the unobservable feature of quality to forcibly
tie up with OYO to the possible exclusion of other players. Any other franchisee arrangement with
competitors like FabHotels and Treebo would delist them from the dominant intermediary i.e.
MMT-Go reducing their visibility and footfalls. Even if the delisting of FabHotels and Treebo by
MMT-Go is not seen as a manifestation of abuse in itself for the sake of assumption, the position
held by MMT-Go speaks volume of the impact such delisting would likely cause in the market.
Delisting from dominant online channel of distribution sought to create an artificial advantage for
OYO and OYO's hotel partners against Treebo's and FabHotels' hotel partners which was not
based on competition on merits but was an obvious consequence of delisting. This created an
ecosystem of incentives for OYO's hotel partners to continue their association with it not merely
based on OYO's merits but its association with MMT-Go and an ecosystem of disincentives for
Treebo and FabHotels' hotel partners to curtail the association and jump the bandwagon, not
attributable to demerits of Treebo or FabHotels but their dissociation with MMT-Go. Thus, the
Commission has no doubt in holding that the impugned arrangement between OYO and MMT-Go
led to foreclosing the market in the form of denial of market access, under Section 19(b) and (c)
of the Act, for FabHotels and Treebo as also for the independent budget hotels which were
availing some logistic support from these players.
299. As regards the end-consumers also, who were using the OTAs to consummate their
booking or to carry out their searches, the delisting deprived them of the benefits of competition
as the choice of inventory was narrowed down to the properties offered by OYO. But for this
arrangement, FabHotels and Treebo would have been able to list their properties on MMT-Go and
give a wider choice in terms of brands whose services consumers could choose to avail. As
discussed earlier in the order while delineating relevant market, the consumers using online
channels may not be using the offline channels while consummating their transaction
interchangeably. Thus, even if FabHotels and Treebo survived through other modes, like
corporate bookings or offline bookings, the consumers using online modes were deprived of the
competition between different players. Further, given that OYO and MMT-Go agreement was
driven towards the growth of MMT-Go and OYO in their respective markets, the improvement in
-----------------------------------------------------------------------------------------------------------------------------------------------------------
their respective service ability cannot be viewed as flowing from the improvement in the
production or distribution of goods or provision of services. MMT-Go's engagement with other
players in the market would improve their ability to compete with OYO on a level playing field
and the competition amongst these players in the market to gain more attention from consumers
would have also resulted in improved service quality and better pricing. The availability of wider
array of hotels on MMT-Go portals would not only increase consumer choices but also drive
competitors to innovate different technologies and develop more schemes. Thus, the redeeming
factors available under Section 19(3)(d)-(f) do not exist in the present case.
300. Further, the Commission cannot be oblivious to the fact that and
of the OYO Agreement seen together, in light of the respective positions held by MMT-Go and OYO
in their respective markets, the former being a dominant OTA and the latter having significant
market power in the vertical chain can possibly allow such players to bolster their respective
strengths, which if goes unchecked, may not augur well for the market or other market
participants. This would have the impact of creating entry barriers as understood under Section
19(3)(a) of the Act.
301. The Commission is conscious of the contractual freedom of the parties and towards that
end, it is not the Commission's objective to interfere with such freedom. However, when such
freedom leads to anti-competitive outcomes, the Commission is statutorily duty bound to
intervene. The denial of access in the present case, as an admitted position, has emanated from
an exclusionary and mutually beneficial agreement between MMT-Go and OYO and not from any
non-compliance of contractual commitments on part of FabHotels and Treebo.
302. The Commission is thus, convinced that the conduct of MMT-Go in delisting FabHotels
and Treebo, as well as the budget hotels which were availing some logistic support from them, in
2018 had adversely affected competition in the market by denying access to an important
channel of distribution through foreclosure. Thus, the Commission feels no hesitation in
concluding that the delisting occasioned to FabHotels and Treebo, as well as the budget hotels
which were availing some logistic support from them, in 2018 was anticompetitive within the
meaning of Section 3(4)(d) read with Section 3(1) of the Act.
303. This brings us to the second, and an equally important question—whether the relisting
by MMT-Go of FabHotels and Treebo was sufficient to correct the market distortion which was
caused pursuant to delisting. MMT-Go and OYO both have argued that FabHotels and Treebo have
now been relisted on the MMT-Go's platform and thus, even if there was any foreclosure
occasioned to them, such foreclosure has been remedied post their relisting. FabHotels and
Treebo, on the other hand, have argued that though they have been relisted, they have not been
accorded fair and non-discriminatory access.
304. FabHotels has submitted that a comparison of its stayed room nights data for the period
September 2017-April 2018 with September 2021-April 2022 demonstrates that FabHotels'
relisting has not been fair and non-discriminatory. While prior to delisting, the room nights
booked through MMT-Go was more than of the room nights booked through other
OTAs for the period October 2017 to March 2018, post relisting it was below 50% from
September 2021 to July 2022. FabHotels has further submitted that MMT-Go has been
discriminatory in terms of the visibility being provided to its properties on the MMT-Go portals.
Based on its own internal comparisons, FabHotels has presented data while claiming that,
in , FabHotels' properties received only of the visits that other
“comparable” properties receive on MMTGo Portals. It is further submitted that after MMT-Go re-
listed FabHotels' properties on MMT-Go Portals in September 2021, FabHotels has been charged a
commission rate of 25%, which as per MMT-Go's own submissions is charged to of
the hotels on MMT-Go. This, as per FabHotels is discriminatory. Treebo also made similar
assertions during the hearing.
305. The recent upsurge in online search, booking and shopping has changed the distribution
architecture for sellers and service providers, underscoring the importance of digital distribution
as an essential means for reaching the end consumers. The online marketplace platforms, in
particular, have emerged as key access routes for sellers/service providers to reach consumers
who are increasingly shopping, searching or booking hotel rooms online. The search and
comparison functionalities of the intermediary platforms, their reach and scale, and the network
effects that work in their favour, lead to huge consumer footfalls on these platforms thereby
making presence on these platforms critical for the visibility and competitive ability of
sellers/service providers.
-----------------------------------------------------------------------------------------------------------------------------------------------------------
306. Recent reports and studies (national as well as international) strengthen this conviction
by showing how a few large platforms can control online distribution because of a variety of
factors, including strong network effects in the digital environment, and their ability to access
and accumulate large amounts of data. These characteristics equip these large platforms with
such market power that their actions can influence and affect competition between business
users significantly. The Commission further observes that the market power held by these digital
platforms has accentuated due to the pandemic because of the changing landscape of customer
preferences and nature of transactions, making traditional businesses increasingly dependent on
a limited number of large online platforms, further contributing to the bargaining power
asymmetry between large online platforms on the one hand and their users on the other.
307. Fair market opportunity is the hallmark of competition. Thus, the Commission is of the
view that equitable access to a dominant online intermediation on fair terms is necessary for the
functioning of businesses who rely on such intermediaries to reach the end-consumers. It has
already been discussed in the previous part of this order that the main purpose of listing on an
OTA by a franchisee/hotel is to get visibility, mere presence may not be sufficient. While visibility
is the function of many factors which an OTA can decide, what is important is that such
factors/criteria are objectively decided, transparently communicated to the hotel/franchisees and
fairly implemented. Otherwise, the competition on merits will be severely compromised by
perpetrating conduct/arrangements creating in substance an unequal level playing field, under
the garb/charades of accessibility by a platform. This is neither the intent nor the object of the
provisions of the Act.
308. Thus, while the Commission is not inclined to intervene with the contractual freedom of
the parties to decide their commercial terms of dealing, suffice to reiterate that such terms shall
not be employed as tools to distort fair competition in the market. MMT-Go, as a dominant
channel of distribution, shall endeavor to provide fair and non-discriminatory access of its
platform to users.
309. Based on the foregoing discussion, the Commission is of the view that the commercial
arrangement between OYO and MMT-Go which led to the delisting of FabHotels, Treebo and the
independent hotels, which were availing the services of these franchisors was anticompetitive
within the meaning of Section 3(4)(d) read with Section 3(1) of the Act.
ORDER
310. In the facts and circumstances of the case, the Commission finds the conduct of MMT-Go
in violation of the provisions of Section 4(2)(a)(i) as well as Section 4(2)(c) read with Section 4
(1) of the Act as adumbrated in this order. Further, for the reasons recorded in this order, the
arrangement between MMT-Go and OYO has also been found to be in contravention of Section 3
(4)(d) read with Section 3(1) of the Act.
311. The Commission observes that under Section 27 of the Act, it has wide ranging powers to
impose monetary as well as non-monetary sanctions. Having regard to the submissions made by
the parties and taking a holistic view in the matter, the Commission is of the view that, besides
imposing monetary penalty (which is dealt later in the order), it is imperative to ensure an
environment that supports fair competition amongst the OTAs as well as amongst the franchisee
service providers, which will ultimately benefit consumers and the independent hotels in the long
run. Towards that end, the Commission directs MMT-Go as under:
a. MMT-Go is directed to suitably modify its agreements with hotels/chain hotels, to
remove/abandon the price and room availability parity obligations imposed by it on its
hotel/chain hotel partners with respect to other OTAs.
b. MMT-Go is directed to modify its agreement with hotels/chain hotels, to remove/abandon
the exclusivity conditions that exist inter-alia in the form of D minus clause.
c. MMT-Go is directed to provide access to its platform on a fair, transparent and non-
discriminatory basis to the hotels/chain hotels, by formulating the platforms' listing terms
and conditions in an objective manner.
d. MMT-Go will notify all its hotel/chain hotel partners, about the aforesaid modifications.
e. MMT-Go is directed to provide transparent disclosures on its platform as regards the
properties not available on its platform, either on account of termination of the contractual
arrangement with any hotel/chain hotel or by virtue of exhaustion of quota allocated to MMT
-Go by such hotel/chain hotel. Illustratively, for properties listed on MMT-Go but sold out on
the said portal by virtue of exhaustion of quota allocated to MMT-Go, may specify ‘sold out
-----------------------------------------------------------------------------------------------------------------------------------------------------------
on MMT-Go portal’; similarly, properties continuing to be appearing on MMT-Go portal,

despite termination/expiry of listing arrangement should be removed from the portals and
in the interregnum with a ‘not available on MMT-Go portal’ specification.
312. In the above backdrop, the Commission believes that MMT-Go will earnestly usher in
such practices that reins the anti-competitive conduct as has been found against it and will
implement the directions of the Commission in its true import and spirit. MMT-Go is further
directed to submit a compliance report, on an affidavit, with regard to the aforesaid directions,
within 60 days of the receipt of this order.
313. Further, as regards the imposition of monetary penalty, the Commission notes that MMT-
Go as well as OYO have submitted certain factors that according to them are mitigating and thus,
warrant reduction in their respective penalties, should the Commission decide to impose any
monetary sanctions.
314. MMT-Go has inter alia submitted that even before the Commission has rendered its
decision, it has already voluntarily addressed the allegations raised in the present matter. Parity
obligations though exist have not been imposed and no coercive action has ever been undertaken
by it against any hotel with regard to deviations. FabHotels and Treebo Hotels had been relisted
on MMT-Go's portals during investigation and MMT-Go has assured that they can continue to be
listed after entering into new agreements with it. It was further submitted that the ‘sold out’
aspect arose because of a technical issue and same has been addressed through automation. It
was further submitted that the ‘D Minus’ exclusivity is only with chain hotels and none of the
independent hotels were subjected to it. It was also averred that the hospitality sector has been
severely affected because of the Covid-19 pandemic and MMT's business and operations were
also adversely affected because of the same. Since the industry has just started recovering post
covid, MMT-Go prayed for a lenient view to be taken.
315. OYO has inter alia submitted that it has consistently cooperated with the Commission
and the DG during the course of the investigation and has no objection to MMT-Go listing any
entity on its platforms. Further, the attention of the Commission was also brought to how gravely
the COVID-19 pandemic has impacted the hospitality industry, including OYO.
316. The Commission observes that under the provisions contained in Section 27(b) of the
Act, the Commission is empowered to impose such penalty upon the contravening parties as it
may deem fit, which shall not be more than 10% of the average of the turnover for the last three
preceding financial years, upon each of such person or enterprises which are parties to anti-
competitive agreement or abuse. The Commission observes that the twin objectives behind the
imposition of penalty are : (a) to reflect the seriousness of the infringement; and (b) to ensure
that the threat of penalties will deter the infringing undertakings from indulging in similar
conduct in the future. Further, the quantum of penalty imposed must correspond to the gravity of
the offence, and the same must be determined after having due regard to the mitigating and
aggravating circumstances of the case. The Commission further observes that the Hon'ble
Supreme Court, in Excel Crop Care Limited v. Competition Commission of India, Civil Appeal No.
2480 of 2014 (Excel Crop case), had laid down that the criteria of ‘relevant turnover’ be
considered for the purpose of imposition of penalty.
317. On a holistic appreciation of the facts and circumstances of the case and the mitigating
factors put forth by the OPs, the Commission is of the view that the ends of justice would be met
if a penalty of 5% of their respective relevant turnover is imposed on these erring parties. That
brings the Commission to the determination of relevant turnover in the present matter. Vide
order dated 26.10.2021, the Commission had directed the OPs to furnish copies of their audited
balance sheets and profit & loss accounts(s) for the financial years 2017-2018, 2018-2019 and
2019-2020, along with the revenue generated by MMT-Go from the hotel segment for the said
financial years, by way of an affidavit supported by certificate of Chartered Accountant.
318. The Commission observes that though the contravening conduct of MMT-Go pertains to
hotel segment, the predominant nature of the service that it offers is online intermediation
services. In case of digital market platforms, restricting revenue to just one segment would not
appropriately capture the interdependent and integrated nature of the ecosystem wherein one
product/service reinforces multiple other products/services. This approach might be appropriate
in traditional markets, but not so much so in case of two-sided or multi-sided platforms. In such
platforms, not only two user sides are interacting and thus, intricately intertwined with each
other, but the products/services offered by the platform operator through other verticals also
derive strength from each other due to economies of scope and scale. Accordingly, in such
-----------------------------------------------------------------------------------------------------------------------------------------------------------
markets, for the purposes of revenue determination, the entire platform has to be taken as one
unit. Any other interpretation or approach would render the deterrence exerted by the Statute as
redundant and nugatory. Keeping in view the nature of the services offered by MMT-Go, the
Commission considers it appropriate to consider its entire turnover as shown in its financial
statements submitted by it as the relevant turnover. Based on the foregoing, the Commission
deems it fit to impose on MMT-Go a monetary penalty @5% of its relevant turnover, during the
financial years 2017-2018, 2018-2019 and 2019-2020, as calculated below:
Financial Year MMT (Relevant GoIbibo (Relevant MMT-Go (Relevant
Turnover in crore Turnover in crore Turnover in crore
rupees) rupees) rupees)
2017-2018 2,759.07 1,356.31 4,115.38
2018-2019 3,145.53 1,430.89 4,576.42
2019-2020 3,130.72 1,586.45 4,717.17
Total 9,035.32 4,373.65 13,408.97
Average 3,011.77 1,457.88 4,469.66
5% of Average Relevant Turnover 223.48
Rupees Two Hundred Twenty-Three crores and Forty-Eight Lakhs only
319. As regards OYO, the Commission observes that OYO is a franchisee service provider
engaged primarily in providing services to its partner hotels through listing on its own portal as
well as the portals of other OTAs, besides providing other services to said hotel partners. OYO
submitted financial statements with regard to Oravel Stays Limited as well as Oyo Hotels and
Homes Private Limited (OHHPL/formerly ‘Alcott Town Planners Private Limited’), the latter being
the subsidiary of the former. However, OYO has claimed that only the commissions earned by it
on hotel room bookings be considered as its relevant turnover. Further, OYO has submitted that
for the financial years 2017-2018 and 2018-2019, the commissions earned on hotel room
bookings through Oravel Stays Limited be considered while for the financial year 2019-2020, the
commission earned on hotel room bookings as reflected in OHHPL be taken into consideration for
penalty imposition, if any. Having regard to the business operations of OYO, the Commission
observes that its entire revenue from the business operations constitute its relevant turnover and
the same needs to be taken into consideration, for the purpose of imposition of penalty and a
restrictive interpretation of the term relevant turnover as canvassed by OYO cannot be accepted.
In view thereof, the Commission deems it fit to impose on OYO a monetary penalty @5% of its
relevant turnover, as submitted by it, during the financial years 2017-2018, 2018-2019 and 2019
-2020, as calculated below:
Financial Year Oravel Stays OHHPL (in crore OYO [Total]
Limited (in crore rupees) (Relevant Turnover
rupees) in crore rupees)
2017-2018 265.91 160.86 426.77
2018-2019 3,595.13 535.94 4,131.07
2019-2020 36.29 5,538.98 5,575.27
Total 3,897.33 6,235.78 10,133.11
Average 1,299.11 2,078.59 3,377.70
5% of Average Relevant Turnover 168.88
Rupees One Hundred Sixty-Eight Crores and Eighty-Eight Lakhs only
320. The Commission directs MMT-Go and OYO to deposit the respective penalty amounts as
calculated above within a period of 60 days of receipt of the present order, in accordance with the
provisions of the Act.
321. Before parting with the order, the Commission deems it appropriate to deal with the
request of the parties seeking confidentiality over certain documents/information filed by them
under Regulation 35 of General Regulations, 2009 (as amended). Considering the grounds put
forth by the parties for the grant of confidential treatment, the Commission grants confidentiality
to such documents/information in terms of Regulation 35 of the General Regulations, 2009,
subject to Section 57 of the Act, for a period of three years from the passing of this order. It is,
however, made clear that nothing used in this order shall be deemed to be confidential or
deemed to have been granted confidentiality, as the same have been used for the purposes of
the Act in terms of the provisions contained in Section 57 thereof. Accordingly, the Commission
-----------------------------------------------------------------------------------------------------------------------------------------------------------
directs that two versions of the present order may be issued - non-confidential version which
shall be served upon the parties and a complete confidential version which shall be shared only
with the parties through members of the confidentiality ring. The same shall be prepared keeping
in mind the confidentiality requests made by the parties and the provisions of Section 57 of the
Act read with Regulation 35 of the CCI General Regulations, 2009 (as amended). For
convenience, it is directed that the confidential version of this order may be provided to such ring
members/individuals through one of the ring members, who shall then share the same with the
other ring members nominated by such party/individual. It is made abundantly clear that the
confidential version of this order shall only be accessed by the members of the confidentiality
ring.
322. The Secretary is directed to forward a certified copy of the present order to the parties, in
terms of the directions above.
———
1
The tables are numbered as they appear in the MMT-Go Economist Report.
2
Refers to the Economist in the MMT-Go Economist Report.
3 OECD, Rethinking Antitrust Tools for Multi-Sided Platforms (2018), The Competition Analysis of Vertical Restraints in Multi-
Sided Markets, By Cristina Caffarra and Kai-Uwe Kühn. Available at https : //www.oecd.org/daf/competition/Rethinking-
antitrust-tools-for-multi-sided-platforms-2018.pdf.
4
Available at https : //www.medianama.com/2017/12/223-oyo-exits-from-hotel-aggregation-model-report/, last accessed on
18.10.2022.
5 Case No. 03 of 2019, RKG Hospitalities Pvt. Ltd. v. Oravel Stays Pvt. Ltd., available at
https : //www.cci.gov.in/antitrust/orders/details/177/0.
Disclaimer: While every effort is made to avoid any mistake or omission, this casenote/ headnote/ judgment/ act/ rule/ regulation/ circular/ notification is being
circulated on the condition and understanding that the publisher would not be liable in any manner by reason of any mistake or omission or for any action taken or
omitted to be taken or advice rendered or accepted on the basis of this casenote/ headnote/ judgment/ act/ rule/ regulation/ circular/ notification. All disputes will
be subject exclusively to jurisdiction of courts, tribunals and forums at Lucknow only. The authenticity of this text must be verified from the original source.

Federation of Hotel & Restaurant Associations of India v. Make My Trip India (P) LTD., 2022 SCC OnLine CCI 58

Uploaded by

Copyright:

Available Formats

Federation of Hotel & Restaurant Associations of India v. Make My Trip India (P) LTD., 2022 SCC OnLine CCI 58

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Federation of Hotel & Restaurant Associations of India v. Make My Trip India (P) LTD., 2022 SCC OnLine CCI 58

Uploaded by

Copyright:

Available Formats

SCC Online Web Edition, © 2024 EBC Publishing Pvt. Ltd.

Page 1 Monday, February 26, 2024

2022 SCC OnLine CCI 58

In the Competition Commission of India

Case No. 14 of 2019

denial of market access to Treebo and FabHotels.

as it is on account of the restriction imposed by OYO on MMT-Go.

[Source : MMT reply dated 29.07.2022 : Response to Investigation Report of DG]

the restrictions faced.

191. Undoubtedly, an OTA is an intermediation platform, bringing together end-consumers

benefit or satisfaction. At this stage, it is important to understand what product/service MMT-Go

[space intentionally left blank]

Table 3-1 : Hotel respondents' answers to question:“What is the approximate share

288. Apparently, required MMT-Go to ‘cease to list’ any accommodation, directly

on MMT-Go portal’; similarly, properties continuing to be appearing on MMT-Go portal,

You might also like