Competition commission to monitor real estate markets

LAHORE:

The Competition Commission of Pakistan (CCP) has initiated a formal investigation in real-estate markets of Lahore, Sheikhupura, Kasur and Nankana Sahib over fraudulent practices in the corporate sector.

Speaking to The Express Tribune, a spokesperson for the commission highlighted that the CCP has launched a thorough probe into 62 private housing societies allegedly involved in fleecing common citizens through deceptive marketing.

After conducting public hearings in Lahore, Karachi and Islamabad and concerns raised by the Lahore Development Authority (LDA), he indicated, the commission has initiated this probe to safeguard public interest.

The commission has already slapped over Rs20 million penalties in the real estate sector over similar malpractices and it is most likely that the CCP would impose penalties of another Rs75 million on private housing societies in the aforementioned districts of Lahore division, he said.

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He pointed out that the commission will take action under Section 37(1) of the Competition Act 2010 which empowers it to conduct an inquiry on its own and upon a reference made to it by the federal government.

He highlighted that under the law the issue of deceptive marketing practices has been addressed in section 10 of the Competition Act 2010, which clearly bars distribution of false or misleading information that is capable of harming the business interest of another.

Similarly, the distribution of false and misleading information to consumers, including the distribution of information lacking a reasonable basis related to the price, character, method or place of production, properties, suitability for use or quality of goods is also prohibited, the spokesperson explained.

In addition, false or misleading comparison of goods in the process of advertising or fraudulent use of another’s trademark, firm name, product labeling or packaging are also penalisable offences, he added.

“If wrongdoings are proved the CCP will impose a penalty under Section 38 of Competition Act 2010 on the private scheme’s sponsors to the tune of Rs75 million or an amount not exceeding 10% of the annual turnover of the scheme,” he underlined.

An LDA spokesperson had said earlier that only the authority was taking action against private housing societies involved in such malpractices.

“We have been issuing advertisements against illegal housing societies through print and electronic media regularly.”

He claimed the authority recently wrote to the media houses and the Pakistan Electronic Media Regulatory Authority (PEMRA) to discourage deceptive marketing by private housing societies.

“It [LDA] has also intimated the CCP about this illegal practice by various housing societies in the provincial capital and adjoining districts,” he pointed out.

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Last week, a delegation of the commission led by CCP Member Dr Shahzad Ansar had met the LDA Director General (DG) Sumair Ahmad Syed and discussed modus operandi for safeguarding public interest in the real estate sector.

The CCP representative told the LDA chief that their mutual coordination would not only bring awareness to the general public but would also be beneficial for the buyers as businesses would promote themselves fairly.

The LDA DG said, “These illegal housing schemes are either in violation of the master plan of Lahore division or do not have the approval of the authority.”

Published in The Express Tribune, January 8^th, 2020.