Relevant market definition and absence of dominance defeated the Section 4 unfair-contract terms claim in Gurgaon housing services.

A finding of abuse under Section 4 of the Competition Act, 2002 depends first on proof of dominance in the correctly defined relevant market. The relevant product market was limited to services for development and sale of residential apartments in Gurgaon, as apartments were not interchangeable with villas, plots or independent floors from the consumer perspective. The relevant geographic market was Gurgaon, not the wider NCR, because competitive conditions, regulation, infrastructure and consumer preferences differed across surrounding cities. On the evidence, the market was fragmented and dynamic, and the opposite party group lacked the ability to operate independently of competitive forces; accordingly, it was not dominant and no contravention was established.

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Issues: Whether the opposite party group held a dominant position in the relevant market and thereby contravened Section 4 of the Competition Act, 2002 by imposing unfair contractual terms.

Analysis: The relevant product market was confined to the provision of services for development and sale of residential apartments/flats in Gurgaon, since apartments are not substitutable with villas, plots or independent floors from the consumer perspective. The relevant geographic market was held to be Gurgaon and not the wider NCR, because competition conditions, regulatory factors, infrastructure and consumer preferences differed across surrounding cities. On the evidence of market shares, launches, sales, inventory, financial strength, competitor presence, consumer choices and entry conditions, the market was found to be fragmented and dynamic, with several developers active during the relevant period. Although the opposite party group had financial strength and some leading positions on certain parameters, it did not have the ability to operate independently of competitive forces or to influence the market in its favour.

Conclusion: The opposite party group was not dominant in the relevant market and, in the absence of dominance, no contravention of Section 4 of the Competition Act, 2002 was established.

Ratio Decidendi: A finding of abuse under Section 4 requires prior proof of dominance in the correctly defined relevant market; where the enterprise lacks dominance, allegations of unfair contractual terms do not establish a competition law contravention.

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