ISLAMABAD — The Competition Commission of Pakistan (CCP) has issued a stern advisory to market players, warning that engaging in prohibited trade agreements without prior exemption could attract fines of up to Rs75 million or 10% of annual turnover.
The Commission noted that certain contracts between undertakings and their wholesalers, dealers, agents, or retailers may breach Section 4(2) of the Competition Act, 2010. Such arrangements often involve restrictive clauses — including resale price maintenance, market allocation, and non-compete terms — which can restrict market competition.
Vertical agreements, defined as those between entities at different levels of the supply chain, are considered void from the outset unless specifically exempted by the CCP. The authority clarified that only those agreements which enhance production, distribution, or result in substantial efficiency gains may qualify for exemption, as laid out under Section 5 read with Section 9 of the Act.
The CCP has urged all undertakings to seek exemption in advance to avoid regulatory action. The regulator reaffirmed its broader mandate to curb anti-competitive practices — including cartelization, abuse of dominance, deceptive marketing, and anti-competitive mergers — to safeguard consumer interests and economic efficiency.
