Compat upholds CCI penalty on DLF

The Competition Appellate Tribunal upheld the CCI order imposing a penalty of Rs. 630 crore imposed on real-estate firm DLF for unfair business practices, and abusing their dominant position in the industry.

Compat is a statutory organization headquartered in New Delhi. It was established under the provision of the Competition Act, 2002.

The organisation was constituted on 15th May 2009 with the purpose of hearing or disposing of any appeals against any direction, decision or order passed by the Competition Commission of India. Dr. Justice Arijit Parayat, former Judge of Supreme court, is the first chairperson of Appellate Tribunal.

The Rs. 630 crore penalty on DLF in not their first. Earlier in 2011, CCI had imposed a penalty on DLF for abusing their dominant market position in Gurgaon. It slapped the penalty on DLF for violating Section 4 of Competition Act, 2002. CCI imposed the penalty following complaints of flat buyer association of two DLF projects in Gurgaon, namely DLF Park Palace and Belaire.

The order of Compat has sent a strong gesture to builders all over India.

Economic competition takes place in the market meeting grounds of prospective suppliers and buyers. Competition is the life force of a modern economy which replaces archaic and feeble methods. It rewards the innovative, energetic and the connected.

Governments are typically tempted to create a fair environment in the market, but they instead have turned to culling winners and losers themselves.

The Competition Commission will be a pivotal player in the endeavour to create fair competiton – whether in questioning existing government monopolies or the excessive market power of private player.

Competition hardly figures a perfect eight in standard, neoclassical economics since so-called perfect competition unrealistically assumes perfect knowledge, yet, in reality, most economic activity is about finding and exploiting knowledge and motivating reluctant people with wealth and talents to do same.