Tickets on Jet Airways and IndiGo, two of India’s largest airlines, will no longer be readily available on MakeMyTrip.com, the major online travel agency. The dispute centres on some of MakeMyTrip’s marketing techniques, and should be closely watched. As more and more Indians buy products online, conflicts between big online retailers and the bricks-and-mortar producers whose goods and services the internet sites are reselling will only grow. In this case, the travel portal was using a technique common among its global peers: it would offer some tickets to its customers with a deep discount, without letting the customers know exactly which airline the tickets were on. As a consequence, a customer could find herself booked on Kingfisher, put at the risk of flight cancellation, or even on Air India.
The Director General of Civil Aviation (DGCA) has already condemned the practice, and asked MakeMyTrip to stop publishing what are known as “opaque fares”. The e-retailer has argued that it is merely reproducing what airlines wish it to reproduce. The argument is a familiar one: MakeMyTrip can say it is increasing consumer choice, by allowing for some travellers to buy opaque fares while others, more risk-averse, have the option of knowing exactly what they’re getting into — at a slightly higher price. Meanwhile, the DGCA can frame its regulatory intervention as merely ensuring that all customers have all the information that they require. The normal intuitions that guide customer protection in the bricks-and-mortar world need to be additionally tweaked in such instances to reflect the uniqueness of online shopping. It is much easier to scope out alternatives online than elsewhere; if a customer doesn’t like MakeMyTrip’s policies, visiting its competitors takes her a few brief seconds. Partly, the airlines appear concerned that opaque fares may allow cancellation-hit, debt-ridden Kingfisher Airlines to limp along although informed customers may wish to avoid it. Although many travel portals had issued a statement that they no longer allowed Kingfisher to post unidentified discounted tickets, this newspaper reported one executive as saying that MakeMyTrip was “acting like a banker” for the distressed airline. Clearly, airlines’ fear of opaque fares does not allow them to differentiate them sufficiently from their troubled competitors.
How this dispute plays out will be instructive for the future of e-commerce in India. The airlines’ essential claim is that their branding and differentiation from competitors are important, and should not be obscured in one way or the other. This goes to the heart of whether traditional companies can retain control of their brands in the age of online shopping. Such disputes sometimes wind up in court, with different jurisdictions giving different answers. In Europe, luxury brands like Louis Vuitton hate being sold on plebeian eBay; they fought to retain control of a fraction of their output, and have pushed for a ruling that forced e-retailers to take greater care to keep counterfeits off-line. Courts in the US have denied Google the right to allow companies to run advertisements triggered by a search for a competitor’s products. The global war between brands and online resellers has now reached India.