CCI orders probe against Ghaziabad Development Authority

CCI has ordered an investigation against Ghaziabad Development Authority for alleged abuse of dominant position with regard to sale of a flat under a housing scheme for the economically weaker sections.
After finding that the authority is in a dominant position in the relevant market, Competition Commission of India (CCI) has concluded that it is a fit case for a detailed probe by the Director General (DG).
DG is the investigation arm of the regulator and cases where there is prima facie evidence of competition norms violations are referred to it.
It was alleged that the authority arbitrarily increased the price of a flat from Rs 2 lakh mentioned in the allotment letter to Rs 7 lakh. The informant had got the flat through a lottery draw in 2009 under a housing scheme for the EWS.

For this case, the Commission considered "the market for provision of services for development and sale of low cost residential flats under affordable housing schemes for economically weaker sections in Ghaziabad," as the relevant market.
Noting that there are very few other players in the relevant market who are developing and selling low cost residential flats targeted for economically weaker sections, the watchdog said the authority is in a dominant position.

Further, CCI said the conduct of the authority in unilaterally raising the sale price without any enabling stipulation in the brochure of the scheme or in the allotment letter appears to be abusive.

"The Commission is of the view that the... Conduct of the opposite party (authority) emanating from its dominant position in the relevant market amounts to imposition of unfair price on the informant and other allottees of flats under the aforesaid scheme which is anti-competitive," CCI said in a recent order.
Set up under the Urban Planning and Development Act, 1973 of Uttar Pradesh, Ghaziabad Development Authority is into development and sale of real estate in Ghaziabad.