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Healthy competition is necessary between two companies in the same sector. It encourages companies to bring in their A-game and it is beneficial for the customers as well. But MMT-Go (MakeMyTrip and Goibibo) and OYO (Oravel Stays Ltd.) have been abusing their privilege and dominant positions in the market.
The two companies have been colluding and indulging in anti-competitive practices. The Competition Commission of India (CCI) has charged these two companies and they are now required to pay huge fines for their illegal behavior. They have been ordered to hand over Rs. 392 crores as a fine. MMT-Go is to pay Rs. 223.48 crores while OYO will pay Rs. 168.88 crores.
This hefty fine is being charged for their anticompetitive practices for hotel room listings. The total sum of this penalty will be equal to 5% of their total turnover for the next three years.
MakeMyTrip used its dominant position in the market and had an unlawful arrangement with OYO. MMT-Go delisted all the competitors of OYO from their official website and in turn, OYO was not allowed to sell its rooms to any other site other than theirs.
Federation of Hotel and Restaurant Association of India (FHRAI) filed a complaint with the CCI against these companies in 2019. Following which, CCI conducted an investigation against them and found them guilty. They were later penalized for indulging in corrupt practices.
MMT-Go has been asked by the CCI to alter the present agreements. The company will have to remove all the exclusivity conditions. The parity conditions on the website will also be removed. Along with these changes, MMT-Go will also have to follow proper listing terms and conditions.
This will ensure that the website is fair and transparent to all restaurants and hotel chains, and that there is no favoritism happening.
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