MakeMyTrip, in its submission to the Committee for Digital Competition Law (CDCL)said that he is in favor of ex-ante regulations for digital markets in India, but “only to the extent that they are made applicable to select large horizontal platforms that have created ecosystems in the economy”. It is, curiously, opposed to the ex-ante regulations for the online travel market, the market in which it operates and holds a significant part of the market. He did not provide any reason why he thinks the online travel segment should be exempt.
The comments were made public in the return released by the CDCL regarding ex-ante regulation in India, modeled after the Digital Markets Act (DMA), the new EU competition law. The Committee also published the draft Digital Competition Bill, 2024.
The bill prohibits large digital platforms, identified as Systemically Significant Digital Enterprises (SSDE), from engaging in self-preference, restricts third-party applications, imposes anti-steering policies, abuse of data from the ‘business users, and bundling products and services. The project is open to public feedback until April 15.
Ex-ante regulation aims to prevent anti-competitive competition, instead of actual ex-post framework under the Competition Act, 2002, where the Competition Commission of India (CCI) intervenes after the occurrence of anti-competitive behaviour.
What else did MakeMyTrip say in their submission?
Criteria used in other markets may not be applicable in India: MakeMyTrip’s submission said the criteria that call for the imposition of ex-ante regulations in other economies, such as the EU, do not apply to India due to different economic and market conditions.
The designation of “Gatekeepers” must be at the EU limits or higher: Under the DMA, certain digital companies with significant market control are called “gatekeepers” based on certain quantitative and qualitative criteria. MakeMyTrip suggests that any Indian digital business that is designated a “guardian” under Indian regulation, should be at the EU level or higher to protect domestic players who need to compete with global leaders in the Indian market.
MakeMyTrip’s Prior Anti-Competitive Practices
The Competition Commission of India (CCI), on 18 October 2022, finished MakeMyTrip and its company acquired Goibibo (MMT-Go) ₹ 223 crore and imposed behavioral sanctions for anti-competitive behavior. The investigations were based complaints from 2019 and 2020 presented by the Federation of Hotel and Restaurant Associations of India (FHRAI) and Treebo Hotels, respectively.
The CCI ruled that MMT-Go had a dominant position in the online travel sector and had abused it to its advantage. The CCI agreed with the allegation that MMT-Go did not allow hotels to set a lower price on other platforms, including their own website. They also ruled that MMT-Go prevented hotels from using other platforms through exclusivity agreements, thereby hindering competition.
The CCI also agrees with the allegation that it misrepresented the information, showing some hotels as “sold” and noting that this could lead to lower revenues and, due to its dominant position in the market , could “dissuade the consumer from looking on alternative channels for the same hotel.” In addition, they ruled that MMT-Go engaged in predatory pricing by offering discounts that were impossible for competitors to offer.
Thus, the CCI ordered MMT-Go to:
- Amend its agreement with hotels to remove price parity and room availability obligations with respect to other online travel aggregators (OTAs) as well as exclusivity conditions.
- Provide access to its platform on a fair, transparent and non-discriminatory basis to all hotels and hotel chains by formulating objective terms and conditions of the list.
- Provide transparent disclosures on its platform as to why properties are not available, especially when the reason is either that the contract with the hotel has ended or due to the exhaustion of the quota allocated to MMT-Go by the hotel .
Booking.com could be designated as a guardian in the EU
The European Commission is deliberative on whether the online travel site Booking.com should be designated as a “gatekeeper” in the EU. If so, the ex-ante regulations under the Digital Markets Act will apply to Booking.com in the EU. Similar regulations apply to MakeMyTrip, if the Digital Competition Project, 2024 should it be enacted in India and if MakeMyTrip is designated as a Systemically Significant Digital Enterprise.
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