ISLAMABAD: The Competition Commission of Pakistan (CCP) is conducting an enquiry against the automobile sector against consumer exploitation, including premium payments (On money), delayed vehicle deliveries and increased car prices after booking with full or partial payments.
According to the sources, the investigation is currently hindered by a court order and non-cooperation of a leading car manufacturer. Since the start of enquiry on November 29, 2018, the company has failed to respond to CCP’s requests for information. From November 2018 to November 2022, CCP wrote six letters to call for information under the law, but the company failed to fully cooperate with CCP.
In January 2023, the company filed a writ petition in the Lahore High Court and obtained a stay order.
In January 2023, Lahore High Court permitted CCP to proceed with the enquiry but refrained it from passing a final order. However, in complete disregard of the court order, the said company refused to provide further information.
The CCP initiated the enquiry after noticing car manufacturers, increasing prices for booked vehicles. Numerous consumer complaints through the Prime Minister Portal further prompted the investigation. These leading manufacturers were also causing delays in vehicle delivery and raising prices even after customers made full or partial payments. Authorized dealers were exploiting customers by charging premiums (On money) for early delivery. The CCP expanded the enquiry to other car manufacturers entering the market.
The purpose of the CCP’s enquiry is to determine whether these practices distort competition. However, the conclusion of the enquiry is contingent on the Lahore High Court’s final decision regarding the dismissal of a company’s stay order. The case has been listed for hearing in the first week of December 2023.
The matter is still under investigation, and no adverse findings have been made by CCP against any company. There is no prejudice caused so far. If there is an adverse order, remedies include appeal to the Competition Appellate Tribunal, and the Supreme Court of Pakistan.
In a recent case of a ghee/cooking oil manufacturer, the Supreme Court endorsed CCP’s enquiry and information gathering powers.
The CCP has actively intervened in the automobile sector in the past to safeguard consumer interests. In 2015, the CCP imposed a substantial fine of Rs140 million on the Pakistan Automobile Manufacturers Authorized Dealers Association (Pamada). This action was taken in response to the discovery that Pamada was exploiting consumers by manipulating the prices of their products and services.
In 2013, the CCP played a decisive role in reshaping the landscape of consumer transactions within the sector. Specifically, CCP revised the terms and conditions outlined in the Provisional Booking Order (PBO) of car makers. As a result of this intervention, one company began accepting partial payments, marking a significant departure from previous practices.
This development resembled a consent order, as both car manufacturers willingly amended their conditions in response to the CCP’s regulatory influence.
Such proactive measures by the CCP underscore its commitment to fostering fair and transparent business practices in the automotive industry, ultimately benefiting consumers. Given the diverse array of players offering various products to automobile customers, the CCP relies on collaboration with the courts to effectively fulfill its role in safeguarding consumer interests. This partnership is crucial for ensuring a robust regulatory framework that promotes healthy competition and protects the rights of consumers in a dynamic and competitive automotive market.
Copyright Business Recorder, 2023
Comments
Comments are closed.