2015 (3) TMI 772 - Commission - Indian Laws

Abuse of dominant position under section 4(2)(a)(i) of The Competition Act,2002 - Change in the terms of allotment of flats - Held that - As per OP's own website, it had only one residential project in the relevant market. The informants did not submit any information on the presence of other players in the relevant market in which OP was operating. However, as per the information available in public domain, there are many other real estate developers such as Supertech, Amrapali Group, K.V. Developers, Nirala Group, Earth Infrastructure Group etc. which are operating in the relevant market. Further the size and resources of OP does not seem to be much in comparison to these other players in the relevant market. Also there seems to be no entry barriers or any dependence of buyers on OP for any reason whatsoever. Therefore, prima facie, it does not appear that OP held a dominant position in the relevant market. Since OP, prima facie, does not appear to be in a dominant position in the relevant market, there seems to be no question of abuse of its dominant position within the meaning of the provisions of Section 4 of the Act. - Case close down.

Summary

Issues:
Alleged abuse of dominant position by the OP in a residential project in Greater Noida, UP.

Analysis:
1. The case involved multiple informants filing similar allegations against the OP for abuse of dominant position under section 4 of the Competition Act. The informants booked flats in the OP's residential project based on representations made in brochures. The informants raised concerns about changes in terms and conditions, including an increase in the number of floors and interest rates, through a subsequent application-cum registration form.

2. The informants sought an inquiry into the alleged abuse of dominant position by the OP. The counsel of the informant argued that the definition of 'dominance' under the Act should consider exploitative conduct affecting customers. Reference was made to a previous order to support the argument that dominance can arise from existing agreements between customers and providers. The counsel emphasized the need to evaluate each consumer independently to assess market position.

3. The Commission analyzed the arguments and observed that the relevant market for the case appeared to be the market for the development and sale of residential apartments in Noida and Greater Noida. The geographic market was determined based on the homogeneous conditions of competition in Noida and Greater Noida, allowing consumer substitution between these areas.

4. The Commission further evaluated the dominance of the OP in the relevant market. Despite the allegations of abuse, the Commission found that the OP did not hold a dominant position considering factors under section 19(4) of the Act. The presence of other real estate developers in the market, lack of entry barriers, and consumer independence from the OP indicated the absence of dominance.

5. Consequently, the Commission concluded that since the OP did not appear to be in a dominant position in the relevant market, there was no question of abuse of dominant position under Section 4 of the Act. The case was ordered to be closed under section 26(2) of the Act, with instructions to notify all concerned parties of the decision.