ISLAMABAD: The Competition Commission of Pakistan (CCP) has imposed an accumulative penalty of around Rs45 billion against cartels during the last two years, but mostly the CCP orders are challenged in courts.
Sources told Business Recorder that the CCP undeterred by concerted efforts of vested interests and cartels to delay its enforcement through stay orders has undertaken a record number of enforcement actions including the conclusion of 37 enquiries, initiation of 38 new enquiries, and issuance of 15 orders against 134 undertakings, imposing the total penalties of approximately Rs45 billion during the last two years.
In an effort to impede the recovery of penalties, cartels continue to challenge the CCP’s orders in courts, while also obtaining stay orders on certain enquiries.
The data revealed that the CCP, soon after the taking of charge by the current Chairperson Rahat Kaunain Hassan in July 2020, kicked off and concluded several enquiries in various sectors including sugar, cement, cooking oil and ghee, poultry, automobile including tractors, paint, lubricants, real estate, steel, fast-moving consumer goods, milk, food and beverages, electronic goods, glass, and e-commerce.
In the area of cartels and trade abuse, the CCP initiated 22 new enquiries and concluded 14 and issued five orders against 93 undertakings. The biggest penalty of Rs43.59 billion was imposed on the Pakistan Sugar Mills Association and its 84 member sugar mills.
The second biggest penalty was on a leading electronics company that was Rs1 billion rupees for downstream cartelization.
Similarly, in the area of deceptive marketing practices, the CCP concluded 23 enquiries and initiated 15 new ones.
Moreover, two Policy Notes on sugar and wheat sectors were issued to the government during the same period.
The CCP’s enforcement work involves an elaborate legal procedure from the initiation of enquiry to passing the order. In this regard, the CCP issued 175 show cause notices to undertakings giving them full opportunity of hearing.
In 10 enquiries, the CCP also conducted search and inspections in the premises of different undertakings.
In this period, the CCP granted approvals to 171 mergers and acquisitions in phase-1 and three in phase-2 and granted 131 exemptions under the law. It also continued taking advocacy initiatives to create awareness and held capacity-building programs for its employees.
The CCP is also playing its part in the policy reform by offering recommendations that would enhance economic efficiencies and create a level playing field. As part of its mandate to review the policy frameworks, the CCP’s draft pilot study on the “Assessment of Supply Chain from Farm gate to Retail” recommends policy measures for enhancing economic efficiency and eliminating distortions in the supply chain of essential commodities. Similarly, its report on the SME Sector will offer recommendations for improving the economic efficiencies of SMEs. Moreover, consultative sessions have commenced on the CCP’s draft “E-Commerce Policy Guidelines” and the pilot study for deliberations with the stakeholders.
Copyright Business Recorder, 2022