Track2Realty Exclusive: Consumer rights advocate Lakhendra Singh is even more forthright when he says if CCI has to establish its credibility in the collective conscience; it must make its economic analysis more scientific and full-proof. There can’t be different parameters of defining relevant geographic market and product category for different real estate companies. According to him, CCI instead of being seen as an anti-monopoly watchdog and inspiring confidence has, of late, been in the news for consumer activism.
“Even in the case of DLF, the CCI has faltered as it has not taken precedence of its own judgment in dropping charges against another realty company Tulip Infratech. Moreover, the absence of scientific economic analysis is making the CCI rely heavily on the information available in the public domain which may be borne out of perception than facts. For instance, can there be a google search defined as a research? Moreover, despite of the housing shortage in the urban India I am not sure whether a home seeker is dependent on single realty project to buy a house unless it is a DDA project which costs less than the actual market value”, says Singh.
Even the Competition Act says in order to make a prima facie opinion, whether an enterprise enjoys a dominant position or not, the Commission has to look into the market share of the enterprise in question as compared to the other player, size and resources or other players, size and importance of the competitors, and dependence of the consumers on the enterprise, entry barriers, countervailing buying power, market structure, size of market, relative advantage etc as provided under Section 19 (4) of the Competition Act.
While dismissing the complaint against Unitech, the CCI said, “As per the information available in the public domain, there were numerous players active in this area which had come up and still fast developing and plenty of commercial and residential space offering the same for sale in competition with each other.
These different players had even been offering discounts and other incentives to the public to attract customers. It is apparent that there was no dependence of customers on any single enterprise much less Unitech.” The question is if this is the benchmark of CCI taking cognizance and ordering an investigation, why the same was not followed in dealing with all the complaint against different realtors.
Realty analysts believe the defining of the market dominance on the basis of a narrowed down parameters like high-end super luxury is fraught with the danger of getting into exploitative description of a market, rather than ensuring anti-monopoly fair trade practices. There is a general feeling in the real estate sector that the CCI either sets up its own scientific economic analysis to define the geographical market and product market in realty, or invites the sector representatives to reach a consensus.
It is not clear whether the CCI would be open to such suggestions, but what can be vouchsafed is the fact that the different parameters of establishing relevant geographical market and product in different cases is definitely creating quite confusion in the realty sector.
…..to be continued
