CCP issues notice to company for deceptive marketing

ISLAMABAD: The Competition Commission of Pakistan (CCP) on Tuesday issued show cause notice to a Lahore-based real estate company, M/s Vision Developers (Pvt) Limited, for deceptively marketing a housing scheme in the name of ‘Park View Villas’ without obtaining approval of the concerned authorities, thus violating Section 10 of the Competition Act, 2010.

A complaint was received by the CCP from M/s Nishtar Kamran & Minallah, Advocates and Legal Consultants, filed on behalf of Mubashar Javed, against M/s Vision Developers (Pvt) Limited, a Lahore-based Undertaking, its directors and officers. 

The complainant alleged in his petition that the respondent had applied to the LDA on 22nd February, 2013, for seeking its approval to launch a housing scheme in the name of ‘Park View Villas’ (hereinafter referred to as the ‘housing scheme’) on the land adjacent to another housing scheme namely, ‘River Edge Housing Scheme’, owned by Ammar Ahmad Khan.

According to statement issued by the CCP, it was alleged that M/s Vision Developers (Pvt) Limited is offering residential and commercial plots in an unauthorised/unapproved housing scheme, namely the ‘Park View Villas,’ by concealing the material facts from the consumers/investors in the marketing campaign. It was further alleged that the location of the ‘Park View Villas’ is being shown in the marketing campaign of M/s Vision Developers in an area where another housing scheme in the name of ‘River Edge Housing Scheme’ has been registered with the Lahore Development Authority (LDA) .

An inquiry conducted by the CCP’s Office of Fair Trade established that by running a deceptive marketing campaign, the real estate company not only deceived consumers but also harmed competition in the market. 

According to the CCP’s inquiry report, the real estate market plays a very vital role in development of a country’s economy as a number of other associated sectors have close linkages with this sector. But, unfortunately, real estate sector in Pakistan is neither being regulated in a proper manner nor it is provided with the requisite facilities. Thus, bogus housing schemes and deceptive marketing practices in the real state sector are harming this important sector which is bringing a huge loss to the sustainability of the country’s economy. 

After careful examination of allegations levelled by the complainant and analysing the information, documents and materials collected in the case under report, the CCP is of the opinion that the conduct of the respondent, i.e., launching an unapproved housing scheme and making false and misleading claims regarding the approval status of the housing scheme was not justified. 

Moreover, it said, claiming Park View Villas, an unauthorised and unapproved housing scheme, as a part of River Edge Housing Scheme is unlawful and unjustified.  Furthermore, it said, the name of the scheme was changed in a deceptive manner and it was clubbed as “Park View Villas at River Edge Housing Scheme”, through advertisements in the print and electronic media, lacking reasonable basis related to character, properties and suitability for use of project and was also capable of harming the business interest of other undertakings. 

The CCP said the respondent has, prima facie, entered into deceptive marketing practices, violating the provisions of Section 10(1) in terms of Section 10(2)(a) & (b) of the Act. Therefore, it said, it is recommended that, in the interest of the public at large, proceedings may be initiated against M/s Vision Developers (Pvt) Ltd under provisions of section 30 of the Act for, prima facie, violation of section 10 of the Act. 

During the inquiry, M/s Vision Developers failed to provide a satisfactory justification in support of its claims pertaining to the authenticity of Park View Villas, thus violating Section 10 of the Competition Act. A show cause notice has been issued to the undertaking and it has been called upon for hearing on a given date.