ISLAMABAD: A staggering 68 billion rupees in penalties imposed by the Competition Commission of Pakistan (CCP) across the last few years, remains ensnared in the clutches of 559 pending cases scattered across various courts.
In the recent past, the Special Investment Facilitation Council (SIFC), a joint-venture of the government and the military, has taken decisive actions to clamp down on speculative forex trading and smuggling of petroleum products and sugar which has yielded positive outcomes. These actions have effectively driven down commodity prices and led to the appreciation of the Pakistani Rupee (PKR).
However under the Constitution of Pakistan, it is the Competition Commission of Pakistan (CCP) that has the mandate to curb cartels and mafias. The CCP in this regard, has taken decisive actions in sectors such as sugar, wheat, cement, poultry, automobile, cooking oil, agriculture, oil & gas, ports, shipping, power, insurance, steel, and aviation.
As per CCP, even after repeated actions and penalties imposed by the commission there is no immediate drop in prices in various sectors of high public importance. This is because the parties obtain the stay orders in cartel cases for a long period of time.
CCP has imposed fines worth Rs. 6.3 billion in the cement sector, over Rs 11 billion in the telecom sector, over Rs 1 billion in electronic goods sector, Rs. 140 million in automobile sector, Rs. 300 million in insurance sector, Rs. 75 million to flour mills associations, and Rs. 44 billion in the sugar sector. Total penalties imposed by CCP amount to approximately 68 billion rupees.
Presently, there are a total of 559 cases pending in various courts. Among these, 170 cases are pending in the Supreme Court, where the constitutionality of the Competition Act, 2010 has been challenged. Additionally, 210 cases await resolution in the Competition Appellate Tribunal, which is dysfunctional due to lack of appointment of Chairman Appellate Tribunal.
Lack of appointment of Chairman Competition Appellate Tribunal have also resulted in CCP being bombarded with writ petitions in High Courts.
For instance, in the sugar sector, CCP initiated an investigation in 2020 and discovered that members of the Pakistan Sugar Mills Association (PSMA) collectively took commercially sensitive decisions. Such decisions included reducing domestic sugar stocks, which led to the increase or stabilisation of desired sugar price levels.
In its 2021 Order, CCP imposed a penalty of Rs. 44 billion on PSMA and its members. Presently, this case remains pending in the Supreme Court, the High Courts of Lahore and Sindh, and the Competition Appellate Tribunal.
Moreover, in 2019, CCP found the Pakistan Flour Mills Association (PFMA) guilty of violating the law and imposed a fine of Rs. 75 million. PFMA had been found guilty of fixing wheat flour prices, facilitating the exchange of commercially sensitive information, and manipulating the quantities of wheat flour production. The case is still pending in the Competition Appellate Tribunal.
In 2022, CCP imposed a fine of Rs. 1.1 billion on two home appliances firms for engaging in resale price maintenance (RPM) agreements with their dealers. Through these arrangements, they restricted their dealers from offering discounts to consumers. The case is also currently pending in the Competition Appellate Tribunal.
Similarly, in 2015, CCP imposed a fine of Rs. 140 million on the Pakistan Automobile Manufacturers Authorised Dealers Association (PAMADA). This penalty was levied after CCP discovered that the association had been overcharging consumers by artificially fixing prices for their products and services. The case is pending in the Lahore High Court.
In 2013, CCP successfully dismantled a cartel that had been manipulating the prices of incoming international calls. In its ruling, CCP nullified the International Clearing House (ICH) Agreement among 14 LDI (long distance and international) operators. Subsequently, CCP imposed substantial penalties, such as 7.5% of the annual turnover on each LDI, Rs. 8.30 billion on PTCL, Rs. 534 million on Worldcall, and Rs. 189 million on Telecard. The case is pending in both the Competition Appellate Tribunal and Sindh High Court.
