Competition Commission on Wednesday brushed off allegations of unfair business practices towards Oravel Stays Pvt Ltd, which owns OYO Rooms, announcing it can’t be “unambiguously” concluded that the business enterprise is in a dominant position. For this case, the Competition Commission of India (CCI) considered the ‘market for franchising offerings for budget hotels in India’ because of the applicable one. Oravel Stays affords financial accommodation to customers through online booking underneath the brand-call ‘OYO Rooms.’‘
The ruling came on a complaint filed through New Delhi-based totally RKG Hospitalities Pvt Ltd, which had entered into a ‘Marketing and Operational Consulting Agreement’ with OYO in 2017.
The complainant alleged that the agreement contained clauses that had been one-sided, unfair, and discriminatory, which OYO was capable of imposing due to its dominant function.
The complainant also alleged that the agreement lets OYO unilaterally regulate its resort’s structure to satisfy requirements set via OYO, and the equality is arbitrary.
The agreement also empowers OYO to position exceptional signage of the OYO logo for co-branding with a motel name. This amounts to an abuse of dominance as the complainant alleged that OYO sought to boost its emblem value without investing even an unmarried penny.
The complainant also alleged that OYO’s scoring policy has become unfair and oppressive. There has been no scope to disprove the punitive rating given through OYO based totally on unsubstantiated proceedings by using customers.
The complainant said that OYO violated Section Four of the Competition Act by indulging in such practices.
“…The Commission does not discover alleged contravention of the provisions of Section 4 of the Act towards OYO being made out,” the competition watchdog stated in an order.
Section 4 of the Competition Act pertains to abusing a dominant role in the applicable market.
CCI commented on the dominance: “The Commission is of the view that though OYO can be a large player within the applicable marketplace, presently, it can not be unambiguously concluded that it holds a dominant position.”
Regarding scoring coverage and utilization of signage of OYO brand with the complainant’s resort name, among other clauses in the agreement, the fair alternate regulator said that such clauses are justified to ensure that the offerings offered are of widespread benchmark nice and to ensure customer delight.
Accordingly, it can not be concluded that the phrases and conditions of the settlement in the gift matter are unfair, as alleged within the criticism, CCI said while dismissing the complaint towards Oravel Stays.
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