Indian commission board absolves dominance complaint against OYO

For the case with Oravel Stays, the Competition Commission of India is considering the "market for franchising services for budget hotels in India" as the relevant one.

Competition Commission recently dismissed allegations of unfair business practices against Oravel Stays Pvt Ltd, which owns OYO Rooms, saying it cannot be "unambiguously" concluded that the company is in a dominant position. For the case, Competition Commission of India (CCI) considered the 'market for franchising services for budget hotels in India' as the relevant one. 

Oravel Stays provides budget accommodation to customers through online booking under the brand-name 'OYO Rooms'. 

The ruling came on a complaint filed by New Delhi-based RKG Hospitalities which had entered into a 'Marketing and Operational Consulting Agreement' with OYO during 2017. 

The complainant alleged that the agreement contained clauses which were one-sided, unfair and discriminatory which OYO was able to impose because of its dominant position. 

The complainant also alleged that the agreement allows OYO to unilaterally modify the structure of its hotel to meet standards set by OYO and the same is unfair. 

Besides, the agreement empowers OYO to put exclusive signage of OYO brand for co-branding with hotel name. This amounts to abuse of dominance as without investing even a single penny, OYO sought to increase its brand value, the complainant alleged. 

The complainant also alleged that OYO's scoring policy was unfair and oppressive as there was no scope of disproving the punitive score given by OYO based on unsubstantiated complaints by customers. 

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