The Competition Commission of Pakistan (CCP) has passed 18 orders during the last one year against undertakings involved in anti-competitive behaviour, deceptive marketing practices and prohibited agreements to make profits at the cost of consumer rights.
The orders have been passed during the period of March 2018 to March 2019. This is the largest number of orders the CCP has passed in any single year since its inception, showing the regulator's resolve to target the violators vigorously. These orders were passed in various sectors where companies either harmed consumers' interests through deceptive marketing practices, or were involved in prohibited agreements to make profits at the cost of consumer rights.
At the same time, the CCP also approved mergers of companies in different cases. This year, the anti-trust watchdog also targeted the education sector where certain institutions were playing with the future of students by awarding degrees without meeting the recognition and accreditation criterion. In one such order, (CCP) imposed a total penalty of Rs 22.5 million on three medical and dental colleges for violating Section 10 of the Competition Act, 2010 by fraudulently claiming recognition by the Pakistan Medical & Dental Council (PMDC) and offering admissions to students for 2013-2014 sessions.
The CCP's enquiry had found eight institutions named by PMDC to have misrepresented their recognition by PMDC through their websites, and omitted to communicate the restriction on their admissions for the year 2013-14, thus violating Section 10 of the Competition Act. These eight medical institutions include: Pak Red Crescent Medical & Dental College, Lahore, Mohiuddin Islamic Medical College, Mirpur (AJK), Abbottabad International Medical College, Abbottabad, Independent Medical College, Faisalabad, Women Medical College, Abbottabad, Hashmat Medical & Dental College, Gujrat, Bhittai Medical & Dental College, Mirpurkhas Sindh, (BDS), and AJ&K Medical College, Muzaffarabad.
In a similar order, the CCP passed an order imposing a penalty of Rs 5 million on the University of Management and Technology (UMT) for making false claims regarding its ranking and accreditation in violation of Section 10 of the Competition Act. A CCP's enquiry had concluded that UMT had made multiple deceptive claims in its prospectus and other promotional material regarding its ranking and accreditation just to make profits by luring new students into taking admission in the university.
Pakistani consumers and businesses are also the victims of frequent trademark violations due to lack of awareness. The Competition Act empowers CCP to act against such violators as the law prohibits the "fraudulent use of another's trademark, firm name, or product labelling or packaging." A chain of restaurants mainly operating in Punjab was penalised for selling fake Starbucks coffee on a complaint from Starbucks Corporation, an American chain of coffee houses. Similarly, two hotels were using the official logo of Pearl Continental Hotel thus getting corrected by the CCP. In another such case, CCP imposed a penalty of Rs 4.25 million on seven fabric and packaging companies for deceptive marketing practices and fraudulently using the registered trademark of ShajarPak (Pvt) Limited, a fabric manufacturer.
The CCP also passed an order imposing a penalty of Rs 1 million each on 5 battery manufacturers for violating the Section 10 of the Competition Act by hiding important information about their products from consumers.
A paint company, Reliance Paint, was fixing the minimum resale price for its products and also monitoring and penalising the dealers/distributors/retailers for non-compliance with its price directives. Under its mandate to prevent collusive agreements, the CCP imposed a penalty of Rs 5 million on the company.
In the area of mergers, the CCP approved M/s Alipay (Hong Kong) Holding Limited's acquisition of 45% shareholding in M/s Telenor Microfinance Bank Limited, paving the way for the world's largest mobile payment platform's entry into Pakistan. Founded in 2004 by Jack Ma, Alipay is a part of the Alibaba Group, a Chinese multinational conglomerate specialising in e-commerce, retail, Internet, AI and technology. Telenor Microfinance Bank is Pakistan's first scheduled microfinance bank and provides microfinance and related financial services.
Authorised by the law, the CCP also conducts competition impact assessment studies and therefore, it conducted two studies, one on road construction sector with special reference to CPEC, and the second on LNG sector in Pakistan.
In both studies, the CCP suggested concrete measures to the government for protecting competition and saving the national economy from the ill effects of anti-competitive practices in these sectors. Similarly, the CCP issued three opinions to the government on sugar, automobile and real estate sectors suggesting urgent measures to protect competition. On the advocacy front, the CCP seems to be quite active as it plans to launch several awareness campaigns. The regulator has also launched its Twitter account to directly be in touch with the general public.
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