AFTERMARKET ABUSE OF DOMINANCE IN THE REAL ESTATE SECTOR: ITS ANALYSIS AND NEGATIVE IMPACT ON CONSUMER INTERESTS.

Abstract

India is developing at a pace like never before, both economically and sadly in population. More and more people every year are migrating to metropolitans in search of jobs and consequently for places to live. Thus a vast market for residential real estate has been created in urban India. This need has been gravely exploited by the players in the real estate market. This exploitation takes place when a buyer executes an agreement for purchase with a builder and is then locked- in due to high switching costs in the name of "token money" being charged by the builder, thereby making the buyer vulnerable to any abuse that the builder might throw at him. This vulnerability of the buyer invariably awards the builder, dominance in this market over the consumer. Whatever the intention maybe, such lock- in of consumers and lock- out of competitors in the aftermarket that is created once a consumer executes the agreement for purchase; and the exploitation therein, also stands in contravention of the prohibition of the abuse of one's dominance as prescribed within the Competition Act of India, 2002. Further, since it is this abuse of dominant position that ultimately adversely affects the consumers, this paper seeks to propose that it should be the penalties available within the competition laws which should be used as forerunners to first curb such anti- competitive activities and further safeguard the rights and the welfare of the consumers, who in this case are the buyers.