NEW DELHI: Coming in the crosshairs of competition regulations again, CCI has directed DLF to “cease and desist” from unfair business practices. The latest order has come after a detailed investigation into complaints that DLF indulged in anti-competitive practices with regard to certain projects in Gurgaon, Haryana.
Competition Commission of India (CCI), in the order dated January 4, has decided not to penalise the company since a fine had already been imposed on it. Noting that the DLF group holds a dominant position in the relevant market, CCI has directed the group to “cease and desist from indulging in the conduct which is found to be unfair and abusive in terms of the provisions of Section 4 of the Act”.
Section 4 of the Competition Act pertains to abuse of dominant position. ‘Provision of services for development/ sale of residential apartments in Gurgaon’ was considered as the relevant market. On certain previous occasions also, the watchdog had directed the company not to indulge in unfair business practices.
CCI has now directed DLF Gurgaon Home Developers Pvt Ltd and its group companies to refrain from unfair trade ways but did not impose any fresh monetary penalty. It was alleged that the entity abused the dominant position by imposing highly arbitrary and unfair conditions on apartment buyers at a project in Gurgaon.
Two separate complaints, filed in 2014 and 2015, were clubbed by the regulator which had ordered a detailed probe by its Director General (DG). “The Commission is of the view that since a penalty of Rs 630 crore has already been imposed on the Opposite Party Group (DLF) in the Belaire’s case for the same time period to which the present cases belong, no financial penalty… is required to be imposed,” the order said.
In 2011, the regulator imposed a fine of Rs 630 crore on DLF after founding violation of competition norms following a complaint by Belaire Owners’ Association in Gurgaon. The fine has been challenged by the company. With regard to the latest case, the DG found merit in the allegations of abuse of dominance including compulsorily purchase of the parking space and one-sided agreement tilted in favour of DLF.
After taking into consideration the DG’s report, the regulator said “there is no doubt that the strength which the OP (opposite party) Group possesses in residential real estate segment in the geographic region of Gurgaon is incomparable”. The assessment done by the Commission in the previous orders would also apply in the present matters since the issues, the relevant period and the opposite parties involved are the same, CCI said.
“The Commission is of the view that the terms and conditions imposed on the allottees in the instant matters as analysed by the DG in detail are abusive in nature,” it added.
Credits ET Realty