Nasdaq-listed MakeMyTrip and Ibibo have filed an appeal before National Company Law Appellate Tribunal (NCLAT) against Competition Commission of India (CCI) order of October 19 levying a penalty of ₹223.48 crore on MakeMyTrip-Goibibo (MMT-Go) for indulging in anti-competitive practices.
The matter is likely to be taken up for hearing by NCLAT next week.
A separate penalty of ₹168.88 crore was also imposed on the same date by CCI on OYO. CCI further directed MMT-Go to change its market behaviour and, in particular, modify its agreements with hotels so as to remove the price and room availability parity obligations imposed by it on its hotel partners with respect to other online travel agencies.
While OYO had on November 15 filed an appeal before NCLAT against CCI order, MMT-Go has now filed an appeal before the Appellate Tribunal contending among other things that penalty has been imposed in an arbitrary and disproportionate manner contrary to settled law.
Appeal before NCLAT
In its appeal, MMT-Go has pleaded that CCI order suffers from serious fundamental flaws including violation of the principles of natural justice, non-application of mind, failure to consider economic evidence on record, failure to meet the prescribed legal and jurisdictional standard necessary to find a contravention of the provisions of the Competition Act, 2002. The appeal argues that the impugned order selectively rubber-stamps the one-sided observations and conclusions of the Director General, CCI, without even adverting to the submissions made by MMT-Go in some instances, let alone discharge its statutory obligation to pass speaking orders. The appeal also contains that cross-examination proceedings were never completed by the DG.
Interim stay sought
MMT-Go alongwith its appeal has also moved an application seeking an immediate interim stay on the order of CCI stating that it is also common knowledge that the travel industry was one of the most adversely impacted industry by the Covid-19 pandemic. The travel industry is still trying to recoup from the losses suffered and the Applicants are also still reeling and trying to recoup. In such a situation, an onerous obligation to pay an ex-facie disproportionate penalty would cause an irreparable harm that would also push MMT-Go out of the market as it would be unable to compete with much bigger Indian and global players.
Complaint before CCI
The fair trade watchdog opened an investigation against MMT-Go and OYO in 2019, after Federation of Hotel & Restaurant Associations of India (FHRAI) lodged a complaint with it alleging that MMT-Go imposed a price parity in their agreement with hotel partners whereby the hotel partners are not allowed to sell their rooms at any other platform or on its own online portal at a price below the price at which it is being offered on MMT-Go’s platform.
Also, the hotel partners are mandated to observe room parity whereby they cannot refuse to provide rooms on MMT-Go at any given point of time if the rooms are being provided on any other platform. Further, it was alleged that MMT and OYO entered into confidential commercial agreements wherein MMT has agreed to give preferential treatment to OYO on its platform.
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Published on November 23, 2022
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