The payments, which are an advance on the hotel owner’s share of room revenue, were supposed to be paid no matter how many rooms were booked.

In exchange, the hotels added free breakfasts and linens in Oyo’s signature red and white. They agreed to book all rooms - even walk-in guests - through Oyo and let it control how the rooms were sold on other sites.

“The situation is so bad, we’re looking at it as a scam,” said Pradeep Shetty, the honorary joint secretary of the Federation of Hotel and Restaurant Associations of India, which represents around 3,000 hotels and filed the competition complaint with the Competition Commission of India.