The Competition Commission of Pakistan (CCP) has drafted new Competition Leniency Regulations 2013; Reward Payment Scheme; Conduct of Business Regulations to improve Competition Rules and Regulations in view of past experience, bringing them in line with the latest developments and competitive business environment.
Addressing a press conference on Monday, Acting Chairman CCP, Dr Joseph Wilson said that since assumption as Acting Chairman of the Commission, the CCP has focused on internal re-organisation; revised rules and regulations; enforcement actions; advocacy and capacity building.
The internal restructuring has been done to make the Commission more effective in day-to-day business. Previously, the command and control was in the hands of only one person - head of the Commission. Under new set-up, members have been given more active role in different functions of the Commission. The Commission cannot do new hiring due to ban on recruitment. However, the CCP has new director general CAT and secretary to the Commission.
He said that the CCP has initiated a restructuring programme to enhance the power of its members and balance it with the powers of the chairperson. The reforms are likely to decrease the one person authority in the Commission and the voice of other members would also carry weight in the affairs of the CCP. The past leniency regulations were framed in 2007 which needs to be updated. The CCP has issued new Competition Leniency Regulations 2013 for which SRO would be shortly issued. A number of changes have been made in the old law.
He said that the leniency could only be given when there is allegation of violations of competition laws. Once order has been passed, it is not an alleged violation. The issue of confidentiality has been maintained under the new regulations. Previously, a case of leniency was made public by placing it on the CCP's website which had negative impact on the proceedings. To ensure confidentiality of the applicant under the new Leniency Regulations, upon request by the applicant, the Commission may endeavour, to the extent that is consistent with its obligations to disclose or exchange information, to keep the identity of the undertaking coming forward with evidence of the prohibited activity, confidential until the decision of the Commission to grant leniency, he explained. If a cartel comes for leniency under the Competition Leniency Regulations 2013, its confidentiality needs to be ensured.
Under new regulations, the Commission may grant an undertaking the benefit of total immunity from financial penalties provided the undertaking give the Commission evidence of prohibited activity. Moreover, the undertaking provides the Commission with all the information, documents and evidence available, regarding the prohibited activity; maintains continuous and complete co-operation throughout the proceedings and until the conclusion of the proceedings for the alleged suspected/prohibited activity by the Commission; refrains from further participation in the alleged prohibited activity from the time of its disclosure to the Commission, unless otherwise required by the Commission and must not have taken any step to coerce another undertaking to take part in any of the activities prohibited.
If an undertaking does not qualify for total immunity from financial penalty under the regulation, it may still be entitled to the benefit from a reduction in the financial penalty under regulation, CCP chairman said. Sharing key features of the Reward Payment Scheme, he said that the maximum limit of reward has been reduced from Rs 5 million to Rs 2 million. A person is taking risk in disclosing information and a reasonable amount needs to be allocated for such claimants.
He said that the Conduct of Business Regulations have been made Commission specific instead of chairman specific. It has been made mandatory for convening a monthly meeting of the Commission. The members of the Commission have been empowered to brig their agenda before the Commission meeting. Responding to a question, he said that all penalties would go into the Federal Consolidated Fund. Around 90 percent of the fines imposed are under litigation.
To a query on fee payments made to lawyers, he said since 2007 a total of fee of approximately Rs 2.5 crore has been made to the lawyers. About 3 percent payment of fee by regulators, he said that he has met the chairman SECP, who has assured that the 3 percent of the total fines/penalties would be given to the CCP as per law. He dispelled impression that action against the cartels is slow during the tenure of PML-N government. On the issue of search and inspections, he said that the Commission has to adopt a careful approach while conducting inspections of the undertakings. In case of CNG, the CCP carried out search of the CNG association, but later unable to prove cartel. To a question, he said that if a telecom company is providing free of cost service to its customers and not forcing such consumers to take the service, it is not against the competition law.
About his end of tenure as CCP Member on November 12, 2013, he defended that the federal government had notified that he can work as CCP chairman till appointment of new chairman. He read section 16 of the CCP Act saying that the federal government can appoint most senior member of the Commission to be acting chairman of the Commission unit the appointment of a chairman on regular basis.