Missing links: the DLF order

On the 12th of August the Competition Commission of India (CCI) imposed a penalty of ₹6.3 billion (US$126 million) on a major real estate developer, DLF, for abuse of dominant position.

The CCI began its enquiry under section 4 of the Competition Act, 2002, on receiving a complaint from an apartment owners’ association. The complaint alleged that DLF was abusing its dominant position by including discriminatory and abusive clauses in the allotment agreements.

Taking a close look

On finding that there existed a prima facie case of abuse of dominant position, the CCI directed the director general (DG) to investigate into the matter.

The DG concluded that DLF has a dominant position as it enjoys an economic advantage over other players operating in the market. As such it can operate independently of competitive forces and can also influence consumers in its favour. The DG concluded further that DLF has abused its dominant position by imposing costly exit options, one-sided agreements and unfair conditions on the consumers.

Suchitra Chitale, the managing partner of Chitale & Chitale Partners, heads the competition team of the firm, which advises and acts on the behalf of clients in Indian competition law matters. She has been in practice for more than 24 years.