Makemytrip India Pvt Ltd MMT & Anr Vs Competition Commission of India & Ors (Delhi High Court)
Delhi High Court directed appellant to pay 10% of the penalty amount imposed by the Competition Commission of India, the recovery of the remaining 90% of the penalty amount would remain stayed.
Facts-
Aggrieved by the impugned order dated 19th October, 2022, the Petitioner No.1 – Make My Trip (India) Pvt. Ltd. challenged the same before the NCLAT, Principal Bench, Delhi. Vide the impugned order dated 6th December, 2022, the NCLAT has admitted the said appeal, however, directed a deposit of 10% of the penalty amount, which was imposed by the CCI as a condition for admission of the appeal. The impugned order dated 6th December, 2022 passed by the NCLAT.
Conclusion-
Upon a specific query by the Court as to whether the petitioner is willing to deposit the 10% of penalty amount, subject to which there shall be stay on the recovery of the remaining 90% of the penalty amount, Srinivasan, for the petitioner submitted that, under instructions from Adhiraj Singh, authorized signatory of the Petitioner, that insofar as the said interim protection is concerned, the matter may be relegated back to the NCLAT.
While the Court was dictating the order, the petitioner counsel further submitted under instructions, submits that the Petitioner is willing to deposit 10% of the penalty amount, as directed by order dated 6th December, 2022 by the NCLAT, without prejudice to its right and contentions. Subject to the said deposit being made, the recovery of the remaining 90% of the penalty imposed by the CCI, may be stayed.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
Prathiba M. Singh, J. (Oral)
1. This hearing has been done through hybrid mode.
2. The present petition has been filed by the Petitioners impugning the order dated 6th December, 2022 passed by the NCLAT, Principal Bench, New Delhi in the Competition Appeal (AT) No.57/2022 titled “Make My Trip (India) Pvt. Ltd. & Anr. v. Competition Commission of India”. The said appeal arises out of the order dated 19th October, 2022 passed by the Competition Commission of India (hereinafter, “CCI”) in Case No.14 of 2019 titled “Federation of Hotel & Restaurant Associations of India (FHRAI) and Anr. v. MakeMyTrip India Pvt. Ltd. and Ors. ”, to the following effect.
“311. In the facts and circumstances of the case, the Commission finds the conduct of MMT-Go in violation of the provisions of Section 4(2)(a)(i) as well as Section 4(2)(c) read with Section 4(1) of the Act as adumbrated in this order. Further, for the reasons recorded in this order, the arrangement between MMT-Go and OYO has also been found to be in contravention of Section 3(4)(d) read with Section 3(1) of the Act.
312. The Commission observes that under Section 27 of the Act, it has wide ranging powers to impose monetary as well as non-monetary sanctions. Having regard to the submissions made by the parties and taking a holistic view in the matter, the Commission is of the view that, besides imposing monetary penalty (which is dealt later in the order), it is imperative to ensure an environment that supports fair competition amongst the OTAs as well as amongst the franchisee service providers, which will ultimately benefit consumers and the independent hotels in the long run. Towards that end, the Commission directs MMT-Go as Under:
a. MMT-Go is directed to suitably modify its agreements with hotels/chain hotels, to remove/abandon the price and room availability parity obligations imposed by it on its hotel/chain hotel partners with respect to other OTAs.
b. MMT-Go is directed to modify its agreement with hotels/chain hotels, to remove/abandon the exclusivity conditions that exist inter-alia in the form of D minus clause.
c. MMT-Go is directed to provide access to its platform on a fair, transparent and nondiscriminatory basis to the hotels/chain hotels, by formulating the platforms’ listing terms and conditions in an objective manner.
d. MMT-Go will notify all its hotel/chain hotel partners, about the aforesaid modifications.e.
e. MMT-Go is directed to provide transparent disclosures on its platform as regards the properties not available on its platform, either on account of termination of the contractual arrangement with any hotel/chain hotel or by virtue of exhaustion of quota allocated to MMTGo by such hotel/chain hotel. Illustratively, for properties listed on MMT-Go but sold out on the said portal by virtue of exhaustion of quota allocated to MMT-Go, may specify ‘sold out on MMT-Go portal’; similarly, properties continuing to be appearing on MMT-Go portal, despite termination/expiry of listing arrangement should be removed from the portals and in the interregnum with a ‘not available on MMT-Go portal’ specification.
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319. The Commission observes that though the contravening conduct of MMT-Go pertains to hotel segment, the predominant nature of the service that it offers is online intermediation services. In case of digital market platforms, restricting revenue to just one segment would not appropriately capture the interdependent and integrated nature of the ecosystem wherein one product/ service reinforces multiple other products/ services. This approach might be appropriate in traditional markets, but not so much so in case of two-sided or multi-sided platforms. In such platforms, not only two user sides are interacting and thus, intricately intertwined with each other, but the products/ services offered by the platform operator through other verticals also derive strength from each other due to economies of scope and scale. Accordingly, in such markets, for the purposes of revenue determination, the entire platform has to be taken as one unit. Any other interpretation or approach would render the deterrence exerted by the Statute as redundant and nugatory. Keeping in view the nature of the services offered by MMT-Go, the Commission considers it appropriate to consider its entire turnover as shown in its financial statements submitted by it as the relevant turnover. Based on the foregoing, the Commission deems it fit to impose on MMT-Go a monetary penalty @5% of its relevant turnover, during the financial years 2017-18, 2018-19 and 2019-20, as calculated below:
