NCLAT stays CCI imposed penalty against OYO

NCLAT stays CCI imposed penalty against OYO

The low-cost hotel chain group was fined Rs.169 crores

The National Company Law Appellate Tribunal (NCLAT) has admitted the petition of OYO challenging the order of the Competition Commission of India (CCI) imposing a fine against the company.

The bench led by Justice Rakesh Kumar admitted the appeal following OYO, a low-cost hotel chain group, depositing a 10 percent of the total penalty of Rs.16.9 crores.

The case pertains to the complaints filed against MakeMyTrip India-Ibibo (MMT-Go) by the Federation of Hotel & Restaurant Associations of India (FHRAI), a representative body of the hospitality industry in India, and two budget hotel brands FabHotels and Treebo Hotels.

The complainants claimed that MMT-Go had required price parity in its contracts with hotel partners. It prohibited the hotel partners from selling their rooms for less than what they charged on MMT-Go's platform at other online travel agencies or on their own portals.

The hotel owners cited that MMT-Go indulged in predatory pricing by offering rooms at less than the average rate. It was offering huge discounts to customers, forcing out smaller travel portals.

Thus, CCI initiated an investigation against MMT-Go and OYO. In October, the trade regulator levied a penalty of Rs.223.5 crores on MMT-Go for abusing its dominant position in the online travel booking space and entering into an anti-competitive tie-up with OYO. The competition watchdog also levied Rs.169 crore penalty on OYO.

It had further directed MMT-Go to modify its agreement with hotels to remove the price and room availability parity obligations with other online travel portals. The commission ordered both companies to deposit the penalty within two months.

Aggrieved by the order, OYO filed a suit before NCLAT to seek interim relief.

The tribunal stated that OYO's petition required a hearing and the CCI records the matter by the end of January 2023. The tribunal also granted liberty to the counsels of both parties to complete the pleadings, which must be concluded before the first week of February 2023.

The matter is set for a hearing in April 2023.