CCI orders probe against Ola Cabs for predatory pricing - The Hindu Page 1 of 3

INDUSTRY

CCI orders probe against Ola Cabs for predatory

pricing

PTI
NEW DELHI, MAY 06, 2015 19:07 IST
UPDATED: MAY 06, 2015 19:18 IST

A detailed investigation has been ordered by the regulator after it prima

facie found evidence of Ola violating the competition norms.

http://www.thehindu.com/business/Industry/cci-orders-probe-against-ola-cabs-for-predat... 8/8/2017
CCI orders probe against Ola Cabs for predatory pricing - The Hindu Page 2 of 3

Fair trade watchdog Competition Commission of India (CCI) has ordered a probe
against app-based radio taxi service operator Ola Cabs for alleged predatory
pricing.

A detailed investigation has been ordered by the regulator after it prima facie
found evidence of Ola violating the competition norms.

The CCI has been increasingly looking into alleged violation of fair trade norms by
entities from the new-age sectors like e-commerce and internet. However, it
recently let off as many as five online retailers including Flipkart and Snapdeal
after it did not find any evidence of wrongdoing on their part.
The latest probe follows a complaint filed by Chennai-based Fast Track Call Cab
Pvt. Ltd. against ANI Technologies Pvt. Ltd., which provides radio taxi services
under Ola brand.
For this case, the CCI has taken ‘radio taxi services’ as the relevant market.

After looking into the allegations, the Commission said it is of the view that prima
facie the conduct of Ola amounts to abuse of dominant position.

The Commission has directed its investigation arm — Director General (DG) — to
probe the matter.

During the course of the investigation, the DG would also look into the conduct of
officials of Ola, CCI said in its order dated April 24, which was made public on
Wednesday.

“It is observed from the material placed on record that the opposite party is
spending more money on discounts and incentives [apart from the variable costs
it may be incurring] on customers and drivers compared to the revenue it
earning,” the regulator said.

Besides, it was observed that Ola was spending more, per trip, as compared to its
average revenue gain.

“While the propriety of these figures is a subject matter of investigation, prima

facie, the Commission is of the view that, they indicate predatory pricing aimed to
oust other players from the relevant market,” the order said.

According to Fast Track, Ola has incentivised drivers unrealistically by using the
money it as got through foreign investments, including from Tiger Capital, which
can never be matched by the existing radio cab operators or potential indigenous
enterprises desirous of starting such operations in India.

http://www.thehindu.com/business/Industry/cci-orders-probe-against-ola-cabs-for-predat... 8/8/2017