CCP drafts studies to help create ‘a level playing field’ for SMEs

ISLAMABAD: The Competition Commission of Pakistan (CCP) has drafted two studies of small and medium enterprises (SMEs) and e-commerce sectors, offering solid recommendations to create a level playing field for the SMEs and highlighting possible competition concerns in the e-commerce/ online platforms market.

The study report on “Improving Economic Efficiency in Small-and-Medium Enterprises in Pakistan” offers solid recommendations to ensure a level-playing field for the SMEs to compete, which shall lead to the growth of the SME sector.

The study reviews the SME policy framework in Pakistan and based on two surveys concerning demand side constraints and supply side issues in the SMEs’ growth and challenges in the SME financing, offers recommendations to the Government of Pakistan and other concerned entities focusing on competition aspects, i.e., to ensure a level-playing field for the SMEs to compete, which shall lead to the growth of the SME sector.

The study on “Competition and Trade Practices Regulation in the Era of E-Commerce, Big Tech and Data Sciences”, which highlights possible competition concerns in the e-commerce/online platforms market, which may fall under Section 3 (abusive conduct by dominant platforms) and Section 10 (deceptive marketing practices) of the Competition Act, 2010, and analyses regulation strategies in more developed countries across the globe, as well as, other countries in the region.

The Chairperson CCP, Rahat Kaunain Hassan, launched these draft studies, while briefing the participants of the 23rd meeting of Competition Consultative Group.

With regard to the E-commerce study, she clarified that the CCP does not aim to become a data protection agency or over-regulate. Instead, the study aims to provide guidelines serving as a minimum benchmark of basic disclosures companies should adhere to, to avoid deceptive marketing practices.

The participants were senior level representatives of the regulatory bodies, corporate sector, SMEs, online trading platforms, Pakistan Stock Exchange (PSX), chambers of commerce, and consumer associations. Established in 2008 and recently revived, the CCG is an informal think-tank, which provides a platform to consult with stakeholders on competition-related matters.

The studies are part of the CCP’s strategic vision that identifies the priority areas including the essential commodities for removing anti-competitive distortions in the market, public procurement for reducing collusive practices and promoting fair competition, concession agreements for regulating exclusivity, digital markets and e-commerce for consumer protection, improving the economic efficiency of SMEs and SOEs, collaborations and partnerships for providing guidelines, improving compliance by strengthening the Leniency Framework, and knowledge-based advocacy.

Explaining the rationale behind conducting the studies, Rahat said that the role of the competition regulator is that of an umpire, and whenever it will call for policy intervention, the Commission will voice concerns as per its mandate. While with regard to anti-competitive practices/market distortion, it will act without fear and favour. She said that the Commission strongly believes in effective enforcement which is globally viewed as best advocacy.

While discussing the CCP’s performance, she said that the pace of enforcement has been increased with 28 enquiries, 17 search inspections, and 12 orders passed during the last year, and the imposition of the highest ever penalty of around PKR 40 billion in one year.

The enforcement actions have been completed in important sectors such as sugar, milk, cooking oil, consumer goods, pharmaceutical, beverages, online trading, and education, media, and paint industries.

However, in majority of the cases, the CCP is facing the general difficulty in concluding proceedings due to the parties continuously seeking injunctive relief from Courts even at nascent stages of an enquiry, such as call for information and search and inspections. The chairperson said that the Competition Appellate Tribunal is now functional, which shall aid in clearing the backlog of cases.

She also informed that the CCP has started receiving the three percent of the fee and charges collected by specific regulators (the PTA, the SECP, the NEPRA, the OGRA, and the PEMRA).

Copyright Business Recorder, 2021