As a market regulator, the Commission is not concerned about the individual competitors but of the process of competition: CCI

As a market regulator, the Commission is not concerned about the individual competitors but of the process of competition: CCI

The Competition Commission of India (CCI) stated in its order dated 9 March 2021, that the delisting of FabHotels & Treebo (Applicants) v. MakeMyTrip & Go-Ibibo (Opposite Parties) affected competition in the market by denying access to an important channel of distribution through foreclosure.

The CCI bench comprising of Chairperson Ashok Kumar Gupta, Members Sangeeta Verma, and Bhagwant Singh Bishnoi passed an interim order and stated that "Denial of access to a dominant online intermediation can be lethal to the functioning of businesses that rely on such intermediaries to reach the end-consumers."

The factual background of the case is that MMT/ GoIbibo had entered into a commercial agreement. The MMT/GoIbibo have agreed to give preferential treatment to OYO on its platform and it further agreed to not list the closest competitors of OYO on its platform, i.e., Treebo and Fab Hotels, leading to a denial of market access.

An application was filed by FabHotels and Treebo u/s 33 of the Competition Act, 2002 (Act) wherein they sought directions to Make My Trip and Go Ibibo platforms to re-list them on its web-portals. It was alleged that this action is in contravention of Section(s) 3(4) and 4 of the Act.

The applicants relied on the judgment of the Supreme Court in Competition Commission of India v. SAIL (2010) 10 SCC 744, wherein the Court laid down the criteria for the CCI while deciding prayers on interim relief, that included recording its satisfaction that an anti-competitive act has been committed or continues to be committed; deciding the necessity of the order of restraint and assessing the irreparable or irretrievable damage that the party would suffer.

The CCI in the instant matter agreed to the fact that the balance of convenience lies in the favour of the applicants as its non-accessibility on the platform of the opposite party may significantly obstruct the online visibility of the applicants.

It also noted that if the applicants will be given such access then it will not lead to any significant comparative hardship as such to the opposite party. The CCI found it to be a fit case for exercising its discretion and timely intervention to prevent continuing anti-competitive conduct.

The Commission stated in its order that "With the change in consumer preferences to online booking of hotels, it has become critical, more than ever before, for the budget hotels and those as franchisee service providers to get visibility on Online Travel Agencies (OTAs) to effectively survive. Thus, lack of access to the largest and dominant OTA is likely to cause severe competitive injury particularly in the wake of the pandemic."

The CCI held, "It is in the interest of free market and trade that injunctive orders are called for in this matter and the Commission finds it a fit case to exercise its discretion to allow interim relief in the matter, till further orders."

The Commission stated, "the Commission observes that the relief being sought by FabHotels and Treebo is relisting of their branded properties/hotels, and independent hotels which are availing their other services, on the MMT-Go's online portals. On a cursory glance, this may appear to be in the nature of a mandatory injunction when seen from the perspective of benefits which may be passed on to FabHotels and Treebo through relisting of their partner hotels by MMT-Go. However, the Commission essentially is a market regulator entrusted with the duty to ensure fair competition in the market. In performing such overarching role as a market regulator, the Commission is not concerned about the individual competitors but of the process of competition. The acts/conducts in competition law cases often affect the market on a continuous basis. An act of exclusion, especially, may continually distort the market and from that perspective the act is still in existence. So, when the Commission prohibits/restrains a party from continuing an act/conduct that has prima facie affected the market adversely, it cannot be compartmentalised as being in the nature of a mandatory relief, merely because such prohibition may entail a positive action on the part of the party against whom such relief has been sought."

The Commission noted, "FabHotels and Treebo have primarily prayed for a relisting on the MMT-Go portals for attaining visibility. Accordingly, MMT-Go is directed to allow FabHotels and Treebo to be listed on its online portals."