August 24, 2019 In Uncategorized

COMPETITION COMMISSION OF INDIA HAS HELD OYO ROOMS NOT GUILTY OF ABUSE OF ITS DOMINANT POSITION

The Competition Commission of India (CCI) had passed a judgement dated 31st July, 2019 in RGK Hospitalities Pvt Ltd v. Oravel Stays Pvt. Ltd, whereby the Court held that Oravel Stays Pvt. Ltd (OYO), which is in the hospitality and accommodation sector, has not abused its dominant position.

Herein, the Informant made the following allegations pertaining to the agreement it had executed with OYO (Agreement):

  1. That the terms of the Agreement were one sided, unfair and discriminatory, which OYO was able to impose because of its dominant position in the relevant market.
  2. That OYO required the Informant’s hotel to alter their hotel premises as per OYO’s policies and further, subjected the Informant’s hotel to incentives and disincentives, as per OYO’s policy, based on the hotel’s performance.
  3. That OYO refused market access to the Informant for a period of one year during which they could not have entered into any agreement with online aggregators such as MakeMyTrip, Goibibo, Treebo, etc.

Thus, the Informant alleged that such practices of OYO amount to abuse of dominant position under Section 4 of Competition Act, 2002 as amended thereof (the Act).

The CCI made the following observations and held OYO not guilty abuse of dominant position under the Act:

  1. The CCI was of view that the policies of OYO pertaining to rating of hotel’s performance is necessary and deemed justified so as to provide quality services to the consumers.
  2. Further, the clause pertaining to exclusivity of the Agreement was justified as it was done to prevent the Informant from unduly using the benefits of the know-how of OYO to engage in activities with OYO’s competitors.
  3. That OYO’s market share in the relevant market is less than 10 % and thus, the CCI observed that although OYO may be a significant market player but does not have dominance over the relevant market.

Thus, the CCI dismissed the complaint filed against OYO on the grounds that OYO does not hold a dominant position in the relevant market and thus there is no question of abuse of the same under the Act.

Aakritee Gambhir

Associate

The Indian Lawyer

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