Section 4 of The Competition Act Orders Summary

SECTION 4 OF THE COMPETITION ACT, 2010 – SUMMARY OF ORDERS
In the matter of show cause notice issued to M/s. Pakistan Civil Aviation
Authority, M/s. Pakistan State Oil, M/s. Shell Pakistan limited and M/s. Total
Parco Pakistan limited on complaint filed by M/s. Hascol Petroleum Llimited.
Complainant: M/s. Hascol Petroleum Limited.
Adjudicating members: Shaista Bano and Mr Mujtaba Ahmed Lodhi
FACTUAL BACKGROUND:
The complainant alleged that the respondents were engaged in anti-competitive activities in violation of
the act by not allowing the complainant to operate a fueling facility at Jinnah International Airport
(JIAP). It was further alleged Respondent No 1 allegedly has granted exclusive rights, in respect to the
use of the fueling facility, to a consortium comprising of Respondent No 2, 3 and 4 through Agreement
of Sale for supply of fuel to aircrafts through a Hydrant System installed by it at Jinnah International
Airport (JIAP) for a period of 30 years . It was further alleged that an agreement of sale 1994 agreement
in regard to the operational management of the fuel hydrant system was entered into Civil Aviation
Authority as the seller and Sshell, PSO and Caltex as purchaser on 7th April 1994.
Prior to 1994 Agreement, fuel was supplied under an agreement known as Eastern Joint Hydrant
Agreement (the “'the 1961 Agreement”') which allowed third parties access to the system upon
payment of a throughput charge. The Enquiry Committee concluded that the 1994 Agreement of Sale
ostensibly restricting competition in the relevant market and therefore, is prima facie a prohibited
agreement in terms of Section 4(1) read with 4(2)(a) of the Competition Act, 2010 (the “Act”).
It further concluded that the 1961 Agreement appears to confer exclusive rights on Respondents 2, 3
and 4 to own, control and maintain the fuel tank farm for an indefinite period of time, thus ostensibly
closing this market to other aspirants or potential competitors in prima facie contravention of Section
4(1) read with 4(2)(a) of the Act. The Enquiry Committee, in light of the findings, recommended the
Commission to initiate proceedings against Respondents 1, 2, 3 and 4 for the 1994 Agreement and
against Respondents 2, 3 and 4 for the 1961 Agreement under Section 30 of the Act.
The Enquiry Committee, in light of the findings, recommended the Commission to initiate proceedings
against Respondents 1, 2, 3 and 4 for the 1994 Agreement and against Respondents 2, 3 and 4 for the
1961 Agreement under Section 30 of the Act.
ISSUE:
The issue before the adjudicating officers was whether Has the Enquiry Committee incorrectly defined
the relevant market by failing to consider the fuelling system as a substitute for the Hydrant System at
Jinnah International Airport (JIAP), Karachi and whether ?
Are the 1961 Agreement and the 1994 Agreement were in violation of the provisions of Section 4 of the
Competition Act?.
The Bench noted that having multiple fuel farms or delivery systems at airports might not be
commercially viable, emphasizing the importance of businesses actively competing when opportunities
arise. The Bench held that the 1961 Agreement conferred exclusive rights on the Consortium for
ownership, operation and maintenance of fuel farms facilities for an indefinite period of time, hence
preventing other Oil Marketing Companies (OMCs) to compete for the same. Whereas, the 1994
Agreement conferred exclusive rights on the Consortium as operators for use of the fuel Hydrant System
at JIAP Karachi, hence preventing competition for other OMC's that were willing to supply jet fuels to
airlines at JIAP. Therefore, both agreements had the effect of excluding competitors for entering into the
relevant market therefore prohibited under section 4(2) (a) read with Section 4(1) of the Act.
CONCLUSION:
The parties to the 1961 and 1994 Agreement shall apply to the Commission for retrospective and
prospective exemption under Section 5 of the Act as per applicable regulations no later than thirty (30)
days from the date of this Order. 2 Failing which the exclusivity clauses in the 1994 Agreement and the
1961 Agreement shall stand void as per Section 4(3) of the Act. 3 CAA shall ensure that upon expiry of
the 1994 Agreement on 20 May, 2022, operation and management of both the fuel farm and the fuel
hydrant system at JIAP, is opened for competition under a transparent, open, and inclusive process. 4 All
Respondents shall le compliance reports in the matter with the Registrar to the Commission not later
than ten (10) days after undertaking necessary actions required above.
In the matter of Show Cause Notices issued to M/s. Medialogic, PBA and BAC on
complaint filed by Bol Media Network
Complainant: M/s Bol Media Network, M/s Labbaik Pvt Limited and M/s Bol enterprises Pvt
Adjudicating members: Ms. Bushra Naz Malik and Mr. Mujtaba Ahmad Lodhi
FACTUAL BACKGROUND:
This order shall dispose of the proceedings initiated to M/s Pakistan Broadcaster Association (PBA or
Respondent No.1), M/s Broadcaster Advertisers Council (BAC or Respondent No.2) and M/s Medialogic
Pvt Limited ( or Respondent No.3) collectively referred as respondents for the purpose of violation of
section 4 of Competition Act 2010. The complainants are M/s Bol Media Network (Complainant No.1),
M/a Labbaik Pvt Limited (Complainant No.2) and M/s Bol enterprises Pvt (Complainant No.3) restricted
the competition in the market in violation of section 4 of Competition Act 2010.
The complainants formally complained against the respondents for allegedly not providing their rating
services as outlined in three agreements.
First agreement was executed 15 July 2018 between Medialogic and PBA, wherein Medialogic was
restricted from providing services to any other broadcaster other than PBA. Second agreement was a
Joint Venture Agreement on November 2017 between PBA and Pakistan Advertiser Society (PAS) to
create BAC. According to this agreement, the broadcasters, who were not PBA members, were excluded
from being members of BAC. Third agreement was executed on 5 January 2018 between BAC and
Medialogic, under which BAC shall endorse the services provided by Medialogic being the official
industry currency. Moreover, the approval of BAC would be necessary in case Medialogic grants rating
to any other customer.
ISSUES:
The issues regarding the agreements involve certain clauses that appear to restrict competition.
1. Agreement No. 1's Clauses 3.5.1, 3.5.3, 3.5.4, and 10.2 are said to limit the market for potential
competitors of PBA's members, potentially violating Section 4 of the Act. The differing conditions for
obtaining ratings disadvantage non-PBA members, possibly violating Section 4(1) of the Act.
2. Agreement No. 2 aims to prevent non-PBA members from joining BAC, which could violate Section
4(2) (a) of the Act.
3. Clauses 1(f), 2(f), and 3(b) of Agreement No. 3 may create restrictive trading conditions, possibly
violating Section 4(1) of the Act.
4. By denying ratings to a complainant with an audience, PBA could be seen as dividing the market for
TV advertisement airtime among its members, possibly violating Section 4(1) of the Act.
Based on these findings, the Enquiry Committee recommended that the Commission consider initiating
proceedings against PBA, BAC, and Medialogic under Section 30 of the Act.
The issues before the bench are whether the agreements/arrangements between Medialogic, PBA and
BAC are in violation of Section 4 of the Act? Whether the Commission has the jurisdiction to take
cognizance of this matter, pursuant to the orders passed by the Supreme Court of Pakistan?
The Bench found that the three agreements affected broadcasters, advertisers, and rating companies,
which are interconnected markets. It noted that Medialogic had provided ratings to Complainant No. 1
before signing Agreements 1 and 3 but stopped afterward. The complainants were also refused
membership in PBA, viewed as discriminatory, and BAC delayed approving their membership.
Consequently, all three agreements among the respondents were seen as limiting the market and
hindering entry for non-PBA members and new entrants, potentially breaching Section 4.
Based on the available facts and evidence, the Bench concluded:
By denying ratings to non-PBA and non-BAC members, including the Complainants, PBA had divided or
shared the market for TV advertisement airtime between its members, which was a violation of Section
4(1), read with Sub-section 4(2) (b) of the Act. Clause 3.5 of Agreement 1 applies dissimilar conditions on
otherwise equivalent transactions on non-PBA members, putting them at a competitive disadvantage in
violation of Section 4(1), read with sub-section (2)(f) of the Act. Agreement 2 was designed to restrict
entry of and exclude non-PBA members from BAC in violation of Section 4 read with sub-section (2)(a) of
the Act. Clauses 1(f), 2(f) and 3(b) of Agreement 3 also amounted to a decision by BAC to impose
restrictive trading conditions, which was a violation of Section 4 (1), read with sub-section (2)(a) of the
Act.
The Bench noted that the Supreme Court's Order in CR.O.P 108/2018 in Human Rights Case No.
34069/2018 rendered the agreements obsolete. The Supreme Court directed PEMRA to regulate TAM
ratings and issue licenses to rating companies according to its mandate and applicable laws. Therefore,
the Bench decided not to impose any penalties on the Respondents, as the complainants' grievances
had been resolved by the Supreme Court's Order.
CONCLUSION:
The Commission issued directions of a prohibitory nature to the Respondents under Section 31(b) of the
Act by warning them from engaging in any such activities in the future and, if so, the Commission would
be inclined to take strict action against such entities. The Respondents were thereby directed to le
commitments that they shall not repeat a violation of such nature and shall act in accordance with law.
PBA was also directed to confirm the status of BAC and to provide details in respect thereof, as BAC was
an entity established as a result of a joint venture between PBA and PAS.
Show Cause Notices issued to M/s. Diamond Paints (Pvt.) Limited and its
Dealers.
Complainant: M/s diamond Paint Industries, M/s Arain Paints Multan, M/s Gulzar Paints Multan, M/s
Madina Paint Multan, M/s Bismillah Paints Multan, M/s Hajji Sultan & Sons, M/s Hamza Paint Sultans,
M/s Nadeem Brothers Multan and M/s Al Maqsood
Adjudicating members: Ms. Shahista Bano & Ms. Bushra Naz
FACTUAL BACKGROUND:
This order shall dispose of the proceedings issued under section 30 of the competition Act 2010 to M/s
diamond Paint Industries, M/s Arain Paints Multan, M/s Gulzar Paints Multan, M/s Madina Paint Multan,
M/s Bismillah Paints Multan, M/s Hajji Sultan & Sons, M/s Hamza Paint Sultans, M/s Nadeem Brothers
Multan and M/s Al Maqsood Traders by the competition commission of Pakistan violation of section 4 of
the Act.
The Commission received a copy of an agreement from an anonymous source bearing the title
‘Agreement for Retail and Wholesale Rate fixing (the ‘Agreement’) and was ostensibly undertaken
between Diamond Paints and its dealers based in the city of Multan. Based on the contents of the
Agreement a team of officers was authorized to enter and search premises of Diamond Paints under
Section 34 of the Act, to look for evidence of any possible violation of Section 4 of the Act. Subsequent
to the findings of the search & inspection team an enquiry was initiated to duly probe into the matter.
The enquiry concluded that the dealers by agreeing on a price floor for onward sales of the relevant
products have entered a price fixing Agreement in prima facie violation of Section 4(2) (a) of the Act. It
was elaborated by the enquiry report that the Diamond Paints has effectively entered into a Minimum
RPM arrangement with its dealers, thereby introducing a restrictive trading condition that appears to
facilitate a downstream cartel with the object or effect of restricting competition in the Relevant Market
in prima facie contravention of Section 4(2) (a) of the Act.
ISSUES:
a) Whether the Competition Act, 2010 is ultra vires the Constitution, and beyond the legislative
competence of the Federal legislature?
b) Whether the Commission cannot proceed in the matter due to lack of quorum in terms of Section
14(1) of the Act?
c) Whether the relevant provisions of the Competition Act, 2010 were followed in proceedings against
Diamond Paints?
d) Whether the parties to the proceedings in the instant matter are undertakings of clause (q) of
subsection (1) of Section 2 of the Act?
e) What is the relevant market for the purpose of the instant matter?
f) Whether Diamond Paints entered into an ‘Agreement’ for the fixing of price?
g) If Diamond did entered into an Agreement – does it violate section 4 of the Competition Act, 2010?
CONCLUSION:
The Commission determined that it is not within its jurisdiction to decide on the constitutionality of the
Competition Ordinance, 2007. Regarding the quorum, the Commission stated that the legislature did not
specify any quorum for the Commission to carry out its functions under the Competition Act. The
Competition Appellate Tribunal had previously ruled that the Commission's actions would not be
invalidated due to the number of members present.
The Commission clarified that according to Sections 34 and 37 of the Competition Act, it has the power
to enter and search premises without any pre-condition, such as the initiation of an inquiry or
proceedings, as long as the reasons are recorded. The Commission found that several companies in
Multan, including M/s Arain Paints, M/s Gulzar Paints, M/s Madina Paints, M/s Bismillah Paints, M/s Haji
Sattar & Sons, M/s Hamza Paints, M/s Al Masoom Paints, M/s Nadeem Brothers, M/s Majid Paints, and
M/s Al Maqsood Traders, had violated Section 4 of the Act by entering into an agreement to fix the price
of paints. This agreement aimed to prevent, restrict, or reduce competition within the relevant market,
which is illegal under Section 4 of the Act. The Commission based its decision on several factors,
including the recovery of documents from the regional office of Diamond Paint in Multan, which implied
that Diamond Paint was aware of and a party to the agreement. The agreement was signed by the area
manager of Diamond Paint and contained clauses that restricted dealers' ability to conduct transactions
and expand their wholesale operations, which was deemed anti-competitive. However, no penalties
were imposed due to the leniency request of the dealers and the lack of conclusive evidence that the
dealers actually acted upon the agreement. The Commission directed the Registrar to distribute Urdu
and English transcripts of the order to all Chambers of Commerce across Pakistan and Paint
Manufacturers for educational purposes.
Proceedings under section 37(2) of the Competition Act, 2010 – complaint filed
by M/s Catkin Engineering Sale & Services (Pvt.) limited against Khyber
Pakhtoonkhwa Directorate of Agriculture Engineering under regulation 17(2) of
the Competition Commission (General Enforcement) Regulations, 2007
Complainant: M/s Catkin Engineering Sale & Services (Pvt.) limited
Adjudicating members: Dr. Muhammad Saleem & Dr. shahzad ansar
FACTUAL BACKGROUND:
M/s Catkin Engineering Sale & Services (Pvt.) Limited ("Complainant") lodged a complaint with the
Commission against the KPK Directorate of Agriculture Engineering ("Respondent"). The complaint
alleged that the Respondent's tender for the procurement and installation of 'Deep Solar Pumping
Systems on Agriculture Tube-wells/Open-wells' included restrictive trading conditions, which violated
the Competition Act, 2010. The complaint specifically requested the removal of the following tender
conditions:
1. Company / firm must have registration with Khyber Pakhtunkhwa Revenue Authority;
2. Company / firm must have PKR 200 million average turnover for the last 03 years in solar
pumping systems;
3. Company / firm must have experience of projects of similar and complex nature worth PKR 10
million completed in last five years; and
4. Company / firm should have test bed for verification / testing of solar pumps along with all
accessories as per ISO 9906 in company premises.
An enquiry was constituted to duly probe into the matter.
The enquiry report determined that the clauses in the tender did not negatively affect competition. It
was recommended that since there was no apparent violation of Section 3 & 4, the matter should be
closed.
Following the Commission's decision in the appeal filed by Fecto Belarus Tractors (Pvt.) Limited, the
Complainant was given a chance to present their case regarding the findings of the enquiry committee,
in accordance with the principles of natural justice.
CONCLUSION:
The representative for the complainant assured the Bench that they had no issues with the findings of
the inquiry report. They further requested that the complaint be withdrawn. The Commission deemed
the complaint to be without merit and rejected it. They also provided guidelines for the application of
Section 37(2) of the Competition Act:
1. It is fair and in line with natural justice principles to provide the complainant with a hearing before the
complaint is disposed of.
2. A formal complaint alone is not enough to trigger a formal inquiry under Section 37(2). The complaint
must meet specific criteria, such as being filed by an undertaking or a registered consumer association
and being supported by prima facie evidence.
3. In cases involving deceptive marketing practices, the burden of proof lies with the undertaking, i.e.,
the manufacturer/seller of goods or provider of services, to substantiate the claims made during the
marketing of their products/services.
In the matter of Show cause notice issued to M/s Pakistan Flour Mills
Association (PFMA)
Complainant: Competition Commission of Pakistan
Adjudicating members: Vadiyya Khalil, Dr Shahzad Ansar & Dr. Muhammad Saleem
FACTUAL BACKGROUND:
PMFA is a legal representative body of the flour mills. Previously it was registered under section 26 of
the Companies Act 1913. The commission took notice of the news item published in Daily Dawn dated
June 2015, 4 October 2015 and 8 June 2016 suggesting an unusual price hike in the prices of ‘’wheat
flour’’ or ‘’wheat atta’’ across Pakistan. After an initial probe the Commission in pursuance of section 34
of the Act. After an initial probe, search and inspection of the premises of PFMA, due research on the
wheat flour milling industry and meetings with representatives of PFMA on 13 December 2016, an
enquiry committee was constituted to investigate.
PMFA filed written reply to SCN on 9 April 2018 that PMFA is not undertaking as defined under
Competition Act 2010 since it is not engaged direct or indirect production, supply or distribution. It did
not enter into any agreement prohibited under section 4 of the Competition Act 2010 and was not
involved in any other restrictive trading conditions.
Enquiry has been held in violation of basic principle Article 10-A of Constitution. It failed to regulate the
summon/regulator of PMFA. Moreover their inquiry are based on text messages In fact prices are fixed
by provincial governments only forward this message through SMS to all its members.
The inquiry report concluded that the recommendations of the PFMA amounted to a decision by an
association of undertakings and were in violation of Section 4 of the Competition Act, 2010. It further
elaborated that this was not a one-time occurrence; rather, the association had contravened the
provisions of the Act on multiple occasions through its actions.
ISSUES:
i) Whether the Enquiry is conducted in violation of principles of natural justice or in particular Article 10-
A of the Constitution of Islamic Republic of Pakistan, 1973?
ii) Whether PFMA is an association of undertakings in terms of Section 2(1) (q) of the Act?
iii) Whether PFMA has violated the provisions of Section 4 of the Act?
For the purpose of issue No.1 support for the reasonable opportunity of hearing is granted as per the
precedents of UK and US: Rees and others, Regine v Saskatchewan, Pary Jones v Law society. In regards
to due process or procedural fairness reference is made to the case reported as 1998 SCMR Aftab
Shaban vs President of Pakistan. In context of enquiry process US vs Equal Employment & U.S. Tolbert vs
McGriff.
For issue No.2 2009 CLD 638, 2010 CLD 454, 2013 CLD 1184, 2016 CLD 289, 2017 CLD 229, 2019 CLD
1285 and 2019 CLD 1152 it has been held in these orders that the word ‘’association’’ used in S.2(1)(q)
of the Act, any association of natural or legal person engaged in some form of economic activity are
considered ‘’association of undertaking’’. Based on the East and West v Queenland, University of Punjab
v Mst Samea, Muhammad v Ikramullah and Coperative v State Life Insurance the final statement is that
PFMA is an association of Flour Millers engaged in the production and supply of Wheat Flour and all
other products which are extracted from the grinding of Wheat.
For issue No.3 the order discuss the importance of this sector as well as the overview of the Wheat Flour
sector in Pakistan.
CONCLUSION:
The Commission held that the enquiry committee during the enquiry proceedings, and the bench of the
Commission, during the proceedings under Section 30 of the Act, had fulfilled the requirements of due
process and natural justice, and noted that it was on record that the representatives of the PFMA met
with the enquiry committee and various documents were provided by them, which were considered and
have been brought on record by the enquiry committee.
PFMA was also given sufficient opportunity to present their view point and place documents on record
during the proceedings before the Commission.
The Commission further held that PFMA is an association of Flour Millers, who are undertakings
engaged in production and supply of Wheat Flour and all other products which are extracted from the
grinding of wheat, and therefore PFMA is an ‘association of undertakings’ and is consequently an
undertaking in terms of Section 2(1)(q) of the Competition Act.
The Commission in its Order imposed a penalty of Rs. 75 Million on PFMA for taking decisions with
respect to fixing the price of wheat flour and the quantities of production of wheat flour by its member
mills. Furthermore, the Commission issued directions to PFMA informing them that discussions,
deliberations and decisions regarding current and future pricing, production and marketing are
anticompetitive and should be avoided at all costs by the association.
In the matter of show cause notice issued to Pharma Bureau.

Adjudicating members: MS. Vaddiya Khalil, Dr. Muhammad Saleem & Dr. Shahzad Ansar
FACTUAL BACKGROUND:
The Pharma Bureau registered under the Companies Ordinance 1984 (Now Company act 2017) is an
association of undertakings with the meaning of section 2(1)(q) of the Act. The association is the
representative body of more than 20 multinational pharmaceutical companies engaged in the business
of manufacturing, distributing and/or marketing of various drugs/pharmaceutical products across
Pakistan. In multiple news report surfaced in leading newspapers highlighting alleging that a number of
MCPs have increased prices of a range of medicines up to 300% at the behest of the Pharma Bureau or
otherwise.
The investigation's findings led to the issuance of a Show Cause Notice to the Pharma Bureau. It was
concluded that the Pharma Bureau and its members were possibly involved in sharing strategic and
commercially sensitive information. This included updates on prices, costs, profits, demands, and
industry trends, which were used to deliberate and make recommendations on price increases for
various pharmaceutical products by multinational companies. These actions were deemed to violate
Section 4 of the Competition Act. Additionally, the investigation revealed that the Pharma Bureau and its
members were likely coordinating to demand price increases across the board. They were also found to
be cooperating to influence pricing policies and engaging in price discussions periodically.
The counsel argued several points regarding the enquiry committee's findings:
1. Different pharmaceutical products should be considered distinct markets, not a single market, as
suggested by the enquiry committee. The market definition in the report is therefore deemed incorrect.
2. The enquiry committee failed to provide any instances of the Pharma Bureau or its members sharing
costing or pricing data with competitors.
3. Competition law does not prohibit interaction between the Pharma Bureau and its members or the
communication of collective proposals or demands to DRAP.
4. DRAP has been seeking stakeholders' comments on the draft drug pricing policy, and the enquiry
committee did not establish a pattern or frequency of information exchange to suggest anti-competitive
activity.
5. Information in the public domain, as established in prior judgments, is not considered strategic or
commercially sensitive.
Overall, the counsel argues that the enquiry committee's findings are flawed and fail to support claims
of anti-competitive behavior.
ISSUES:
Whether Pharma Bureau has violated Section.4 of the Act?
CONCLUSION:
The Commission examined whether Pharma Bureau members exchanged commercially sensitive
information, referencing the Dole Judgments, which suggest such exchanges can restrict competition.
The key criterion is whether the information exchange reduces uncertainty in the market, leading to
coordinated behavior among competitors. The Commission, however, found no evidence of such
exchanges within the Pharma Bureau, determining that the price increase was due to prevailing
economic factors rather than a planned strategy involving the exchange of trade secrets.
The Commission emphasized the importance of remaining vigilant against potential collusion and other
anticompetitive practices. Despite this, the Commission concluded that the Pharma Bureau did not
violate Section 4 of the Act due to the lack of substantial evidence indicating collusion or the exchange
of sensitive information.
In summary, the Commission found no evidence of anticompetitive behavior by the Pharma Bureau. The
price increase was attributed to economic factors, and there was no indication of collusion or the
sharing of sensitive information among members. The Commission underscored the need for
undertakings and associations to be vigilant against collusion and other anticompetitive practices, even
though it did not find evidence of such behavior in this case.
The Commission's decision highlights the complexity of antitrust cases and the importance of evidence
in establishing anticompetitive behavior. It also underscores the role of economic factors in determining
market behavior and the need for regulatory bodies to remain vigilant against collusion and other
anticompetitive practices in the pharmaceutical industry
In the matter of show cause notice issued to M/s Oil Companies Advisory
Council (OCAC) for alleged violation of Section 4 of the Competition Act, 2010.
Adjudicating members: Ms. Vaddiya Khalil, Dr. Muhammad Saleem & Dr. Shahzad Ansar
FACTUAL BACKGROUND:
On 26th January 2018, the commission received letter Transparency International’s ‘’IT’’, it was primarily
alleged that the Gas Regulatory Authority ‘’OCAC’’ awarded Fuel Marketing Contract for Kerosene
without any competitive bidding process. After due consideration of the preliminary probe, an enquiry
was initiated under Section 37 (1) of the Act. The Enquiry Report examined whether the selection of the
Fuel Marketing Contract, procurement methodology adopted, and determination of price can also be
considered as ‘decision’ by OCAC and if so whether these conditions were a prima facie violation of
Section 4 of the Competition Act, 2010.
The Enquiry Report concluded that the entire bidding process leading to selection of the bidder was
managed and controlled by OCAC. OCAC appears to have adopted a procurement method that did not
involve publishing an advertisement. It was noted that all the decision of OCAC, including the selection
of FMC and the procurement methodology adopted had a direct bearing on the final price of kerosene,
and therefore, it appears that OCAC had taken a decision in regard to the price of kerosene. It was
concluded that the decision by OCAC to select the FMC, to adopt a procurement method whereby no
advertisement was published and to fix the price of kerosene was a prima facie violation of Section 4(1)
read with Sub-section (2) (a) of the Act.
OCAC's written reply to the show cause notice (SCN) can be summarized as follows:
1. They deny any arrangement or contract for price fixing with fuel marketing companies, stating
there is no violation under section 4 of the Act.
2. OCAC claims to be a representative body, only interacting with oil refineries and fuel
marketing companies individually, with no financial obligation in the process.
3. They argue that oil refineries cannot fix or vary kerosene prices as it is regulated by the
federal government, and the introduction of a fuel marker system would require a price
increase, which could not be done without government involvement.
4. OCAC asserts that the requirement to publish advertisements is only under the Public
Procurement Regulatory Authority Rules 2004, which is not applicable to them.
5. They state that OCAC, as an association of undertakings, is not required to publish
advertisements and that engaging in negotiation is not unlawful unless the object is to harm
competition. They claim to have sought proposals from six reputable undertakings engaged in
fuel marketing.
6. OCAC argues that the complaint filed by TI based on violation of Public Procurement
Regulatory Authority Rules 2004 is invalid, as the cost of services is to be paid by oil refineries,
not public funds, thus not falling under PPRA rules.
7. They argue against treating two different relevant markets in conjunction to infer anti-
competitive behavior.
8. OCAC claims that the entire process was supported by the government, including the
Economic Coordination Committee (ECC) and Ministry of Energy.
9. They state that the price of kerosene was fixed by the Federal Government, not by OCAC, thus
they are not responsible.
10. OCAC argues that if hiring fuel marketing is considered anti-competitive, the decision was
taken by the federal government, not by them; they only implemented government directions.
11. They assert that mere price fixing or entering into agreements is not a violation of section 4
unless it results in prevention, restriction, or distortion of competition.
12. OCAC argues that the SCN fails to show how competition has been prevented, reduced, or
distorted.
13. They note that the SCN mentions the possibility of passing an order under section 31 of the
Act, which requires actions restoring competition or annulment of the prohibited agreement,
but claim there is no violation in this matter.
14. OCAC points out that the SCN expresses the commission's intention to impose a penalty
under section 38 of the Act if any provision is violated, but they argue that they have acted
strictly under government directions.
In essence, OCAC denies any wrongdoing, stating that they acted within the framework of
government regulations and directives.
CONCLUSION:
The Commission determined that OCAC meets the criteria of an 'association of undertaking' and
qualifies as an undertaking under Section 2(1)(q) of the Competition Act. They identified the
relevant market as the procurement of Fuel Marker Services for Superior Kerosene Oil (SKO) in
Pakistan.
OCAC argued that all decisions were made under the approval of the Federal Government, and
they were compelled to follow government directions. The Commission applied the State
Compulsion Test from EU law, which requires certain conduct to be compulsory, with a legal
basis and no room for individual choice in implementation. They found these criteria were not
met in this case.
The Commission concluded that OCAC's procurement process for Fuel Marker Services violated
Section 4 of the Act. Due to OCAC's compliance-oriented approach, no penalties were imposed.
However, OCAC and other involved parties were directed to adhere to the guidelines set forth in
this case.
In the Matter of show cause notice issued to M/S All Pakistan Newspaper
Society (APNS) on complaint filed by Evacuee Trust property Board for alleged
violation of Section 4 of the Competition Act, 2010.
Complainant: Evacuee Trust Property Board & Competition Commission of Pakistan.
Adjudicating members: Dr. Shahzad Ansar & Dr. Muhammad Saleem.
FACTUAL BACKGROUND:
The complainant is a statutory body established under Act XII of 1975 and manages the evacuate trust
properties in Pakistan. It was alleged by the complainant Midas Private Limited (Midas), Press
Information Department (PID) and APNS have colluded to block its advertisement in all of the
newspapers and periodicals at a dispute over recovering payments. On 29 February 2016 Evacuee Trust
Property Board (ETPB) lodged a complaint with the Commission, wherein it was argued that Regulations
and Circulars formulated by APNS are in violation of section 4 of the Act. An enquiry was initiated to
assess whether of the Rules, regulations, and circulars are in contravention of the provisions of Section 4
of the Act.
The enquiry report examined whether Midas, APNS and PID have colluded in contravention of the
provision of section 4 of the Act. The enquiry report noted that the accounting and payment disputes
between the parties are sub judice before different courts of Pakistan hence it will not expound on them
thus it concentrated on whether the APNS as a trade association and its members undertakings are
acting in contravention of section 4 of the Act.
The Enquiry Report found that clause 1 through 9 of APNS Rules dealt with accreditation of advertising
agencies by its Executive Committee. Based on the analysis of the documents and evidence gathered in
the course of investigation, it was concluded that clause 3(a), 3(b), 3(c), 3(d), 4, 4A(iii), 7 (read with para
13 of ARCE), 4A(v), 6 and 9, 4A(iv) pertaining to conditions for accreditation of advertising agency, trade
discount, credit terms and handling of government business were prima facie, restrictive and
discriminatory in contravention of Section 42(a) and 4(2)(f) read with Section 4(1) of the Competition
Act.
With regards to fixing of the commission of the advertising agencies, the Enquiry Report further
highlighted that clause 4A (iii) and 7 of APNS envisage capping of the commission and clause 10 bars
negotiating advertising rates. The Enquiry Report also found that the paragraph 5 of APNS MOU barred
member publications from offering lower rates, and paragraph 1 of SS Rules also capped trading
discount/commission for supplements in contravention of Section 4(2)(a) read with Section 4(1) of the
Competition Act.
It was further observed that clause 9 of APNS Rules related to the clearing of payment mechanism and
empowered APNS to operate as a clearinghouse on behalf of its members in contravention of Section
4(2)(a) read with Section 4(1) of the Competition Act. If there was any deviation from the aforesaid
rules, APNS could impose sanctions and blacklist clients on behalf of its member undertakings and
paragraph 12 of ARCE imposed a restriction on direct business between clients and the publication.
According to the Enquiry Report, APNS and its member undertaking vide 2003 Circular had attempted to
coerce the government clients to purchase more advertising space, which prima-facie constituted the
imposition of restrictive trading conditions in contravention of Section 4(2)(a) read with Section 4(1) of
the Competition Act. Finally, clause 3(c), 3(e), 4, 7 and 14 of MBH Rules relating to accreditation,
renewal of registration, restriction on business, fixing of the commission of MBHs were also found in
contravention of Section 4 of the Act.
Subsequently, citing their compliance-oriented approach, APNS proposed to amend the impugned
clauses. However, APNS was unable to satisfy the concerns of the Commission on hearings dated 28
November 2016 and 27th March 2018. Furthermore, they failed to provide the requisite documents
requested of them.
ISSUES:
a. Whether the Respondent has adopted decisions that tantamount restrictive trade practices
and/or price-fixing in the relevant market in contravention of Section 4(2) (a), 4(2) (c) and 4(2)
(f) read with Section 4(1) of the Act?
b. If the answer to the above question is affirmative, whether there exist substantial and
reasonable grounds that would mitigate the severity of the consequences attracted by the
contravention of the Act.
CONCLUSION:
The Commission's Order dated 06-12-2018 found the clauses in question to be anticompetitive, violating
several sections of the Competition Act. Consequently, all rules, regulations, and circulars were declared
null and void, and APNS was directed to formulate new ones. Despite recognizing APNS's cooperation
and compliance-oriented approach, a penalty of PKR 10,000,000/- was imposed. APNS was required to
submit a compliance report within 60 days and formulate new rules in accordance with the Act, seeking
exemption promptly. Subsequently, APNS could formulate new rules, regulation and circulars in
compliance with the provisions of Chapter II of the Act and promptly seek exemption under Section 5
read with Section 9 of the Act.
Failure to comply within the specified time period and continued contravention would result in further
penalties under Section 38 of the Act, including a financial penalty of PKR 25,000,000/- and an additional
penalty of PKR 1,00,000/- per day.
Currently, APNS has filed a writ petition before the Islamabad High Court, obtaining a suspension order
regarding the matter. Additionally, an appeal has been submitted before the Competition Appellate
Tribunal.
In the Matter of show cause notice issued to M/S NFC Employees Cooperative
Housing Society for violation of Section 4 of the Competition Act, 2010.
Complainant: Evacuee Trust Property Board & Competition Commission of Pakistan.
Adjudicating members: Dr. Shahzad Ansar & Dr. Muhammad Saleem.
FACTUAL BACKGROUND:
This order shall dispose of the proceedings under section 30 of the Competition Act 2010 issued to NFC
Employees Cooperative Housing Society Limited and M/s Malik Cable Networks for prima facie violation
of section 4 of the Act.
The principal issue in this case is whether the Society and MC Network have entered into agreements for
the provisions of cable TV services to the residents of Phase I of the society which has the object or
effect of preventing, restricting or reducing competition with the relevant market in contravention of
sections 4(2) (a) and 4(2) (d) and 4 (1) of the Act.
The Competition Commission of Pakistan (“CCP”) received concerns by a resident of the society in
question, alleging that they were being forced to subscribe to the sole cable television network provider
i.e. MC Networks and were deprived of an alternative choice. It was further alleged that the residents
were being forced to pay whatever subscription amount MC Networks would charge regardless of the
quality of service provided.
The Enquiry Report concluded that by virtue of the agreement signed between the Society and the
network provider, a barrier to entry has been established as no other network provider is allowed to
provide services within the jurisdiction of the society and the agreement grants exclusivity to the
network provider, subsequently, the residents of the society are forced to subscribe solely to MC
Networks for their network services. Furthermore, it was held that the agreement amounts to imposing
restrictive trading conditions and limiting technical development and investment, therefore the
agreement tantamount to a prima facie violation of Section-4 of the Competition Act, 2010.
ISSUES:
1. Whether the Society is an Undertaking within the meaning of Section 2(1) (q) of the Act? And
2. What is the relevant market for the purpose of these proceeding and in terms of Section 2 (1)
(K) of the Act?
3. Whether the exclusivity granted to MC Networks by the Society for the provisions of cable TV
services has the object or effect of preventing, restricting or reducing competition in the
relevant market in contravention of Section 4 of the Act?
ANALYSIS:
Issue 1 discusses the definition of an "undertaking" under the Act, which includes any entity engaged in
commercial or economic activity, whether natural or legal, regardless of legal status or financing. This
means that both private economic operators and public entities involved in commercial activities fall
under this definition. Therefore, in this case, the society is considered an undertaking under the Act and
is liable for any contraventions.
Issue 2 pertains to the definition of the relevant market, which involves identifying whether products
belong to the same market and determining the geographic market. The Enquiry Report concluded that
the relevant geographic market in this case is phase-1 of the society, as other phases are at different
development stages and are not part of the relevant market currently. Both the product market and
geographic market definitions in the Enquiry Report were deemed appropriate.
Issue 3 analyzes the clauses that grant exclusivity to MC Networks, preventing other service providers
from offering TV and allied services in the society. This lack of choice is detrimental to consumers and
the overall competitive process in the relevant market. Therefore, these clauses are deemed to violate
Section 4 of the Act and are considered void under subsection (3) of Section 4.
CONCLUSION:
By raising and strengthening barriers to entry in the market the society has not only stifled price
competition but also non-price competition i.e. technological innovation and investment based
competition in the relevant to consumer’s detriment.
The Learned Bench held that in the instant matter contravention of Section 4(2) (a), 4(2) (b) and 4(2) (d)
read with Section 4(1) has occurred. The Bench appreciated the compliant-oriented approach of the
Undertakings and levied a fine of Rs. 1,000,000 on the Society, moreover, the Society was warned of
severe consequences should any such behavior come to light in the future.
The society and its management are further directed to file a compliance report in terms of commitment
contained in para 35 & 36 with the registrar of the commission and to deposit the penalty.
In the Matter of show cause notice issued to M/S Reliance Paints Pakistan Ltd
Complainant: M/s Akzo Nobel Pakistan Limited
Adjudicating members: Dr. Muhammad Saleem & Dr. Shahzad Ansar
FACTUAL BACKGROUND:
M/s Akzo Nobel Pakistan Limited filed a complaint with the commission, alleging that the Respondent is
involved in setting a minimum resale price for its products and enforcing this price by monitoring and
penalizing non-compliant dealers, retailers, and distributors. Reliance Paints issued a circular to its
dealers, retailers, and distributors, stating that those who adhere to the company's fixed prices would
receive an 8% monthly discount on their total purchases. However, the company would reduce the
discount if a complaint is received about a dealer not complying with the prices: the first complaint
would result in the discount being stopped, the second complaint would reduce the discount to 5%
annually, and the third complaint would lead to the termination of the dealership agreement. The
circular also instructed dealers not to sell the products to unauthorized dealers.
ISSUES:
1. What is the relevant market, in the instant matter, in terms of clause (k) of subsection (1) of
section 2 of the Act?
2. Whether the respondents practice to request its dealer to not sell its product to other dealers
who are not authorized dealers of the respondent’s products amounts to exclusive dealing and
as such is a violation of section 4 of the Act?
3. Whether the respondent’s practice to force its dealers, not sell its product below a certain price
amounts to minimum resale price maintenance and as such is a violation of section 4 of the Act?
ANALYSIS:
The analysis for issue 1 is that the downstream geographic market may be taken as the territory of
Pakistan, as the conditions of competition for the distribution and dealership of the respondent’s and
competing products are homogeneous across the country. Though there may be price difference owing
to freight cost and other characteristics of the product, the respondent could appoint dealers or
distributors/retailers and sell its product in the entire territory of Pakistan. Accordingly the relevant
downstream geographic market is defined as the whole of Pakistan.
For the purpose of issue 2 the bench finds that in the absence of the complainant having adduced any
credible evidence to support its allegation, the circular does not contain mandatory instructions from
the respondent’s dealer to cease from taking up dealership of competing manufacturers or suppliers of
paint in toto. Furthermore one of the dealers of the respondent has stated that it is engaged in selling
other local brands. Accordingly it cannot be concluded that the respondent imposes an effective
exclusive supply obligation on its dealers.
In regards to issue 3 the Respondent are restrictive of intra band competition amongst the Respondent’s
dealers as the same impairs their ability to compete on prices in the sale and distribution of
respondent’s products. It is found from the circular that the respondent had engaged certain mystery
shopping agents for policing its dealers in order to monitor the resale price arrangements. It is also
found where the dealer is found to be deviating from the respondent’s pricing mechanism the
respondent imposes penalty on them by canceling their margin at first. The respondent has contravened
section 4 (1) of the competition Act.
DECISION:
The bench noted that the Act in general, and Section 4 in particular dictated that the buyers / resellers
must remain free to determine their resale price.
The Competition Commission of Pakistan (CCP) imposed a penalty of PKR 5 million on Reliance Paints
Pakistan for fixing a minimum resale price of its products and making its dealers adhere to a price fixing
agreement, which it found to be in violation of Section 4 of the Competition Act, 2010.
Although Reliance Paints had violated Section 4 of the Competition Act by fixing the retail price of its
products, the Commission took a lenient view because of the commitments the company filed to
address competition concerns. Thus, a penalty of PKR 5 Million was imposed and the company was
directed to immediately stop the practice of price fixing. In the event that Reliance Paints intended to
issue a remedial notice with recommendatory prices for its dealers, it was to intimate the Commission
for determining whether an exemption under Section 5 of the Competition Act was required.
IN THE MATTER OF COMPLAINT AGAINST PAKISTAN ENGINEERING COUNCIL

FILED BY MIS SPI INSURANCE COMPANY LIMITED
Complainant: Saudi Pak Insurance Company Limited
Adjudicating members: Ms. Vaddiya Khalil, Dr. Shahzad Ansar & Mr. Ikram Ul Haque Qureshi
FACTUAL BACKGROUND:
The enquiry was initiated under Section 37(2) of the Act, following a complaint from Mis SPI Insurance
Company Limited, formerly Saudi Pak Insurance Company Limited (the 'Complainant'). The main issue
under consideration is whether MIs Pakistan Engineering Council (the 'Respondent' or 'PEC') has taken a
decision in terms of Section 4(1) of the Act by setting a minimum requirement of 'AA' rating for
insurance companies in prima facie violation of Section 4(1) read with sub-section (2) (a) and/or Section
4(1) read with sub-section (2) (f) of the Act. The Commission initiated an enquiry under Section 37(2) of
the Act after review of a complaint received from the Complainant on 16 February 2016, which was
concluded vide an enquiry report dated 12 August, 2105, (the 'Enquiry Report'). The complaint alleged
that the Respondent had restricted insurance coverage of public civil works to only' AA' rated insurance
companies. This condition had the effect of placing insurance companies not having an 'AA' rating at a
disadvantage.
ISSUES:
1. Whether PEe, being a statutory regulator, is precluded from the definition of 'association of
undertakings' in terms of Section 2(1) (q) of the Act, and thus the mandate of the Commission.
2. Whether the Impugned Provisions of the Bidding Documents constitute a decision by an association
of undertakings with the object or effect of preventing, restricting or reducing competition within the
relevant market in terms of Section 4(1) read with sub-section (2) (a) and/or Section 4(1) read with
section (2) (f) of the Act.
ANALYSIS:
The excerpt discusses the role of the Pakistan Engineering Council (PEC) in setting standards for
insurance requirements. It suggests that PEC can establish objective criteria for banks or insurance
companies to meet in order to be eligible, and these criteria can be included in the Bidding Documents.
However, if PEC fails to do so, it would be exceeding its authority as outlined in its parent act. Regarding
executive sanction, it clarifies that notifications by the Planning Commission from 2002 and 2008 pertain
specifically to the use of Bidding Documents for procurement of engineering goods, works, and services.
These notifications mandate federal, provincial, and district government entities to utilize these
documents for procurement. However, they do not imply that the Federal Government is granting PEC
authority to regulate other sectors.
The statement addresses the defenses raised by the Respondent. It argues that the requirement
implemented in response to the performance of insurance companies constitutes regulation of the
insurance sector. It emphasizes that the responsibility for encouraging insurance companies to improve
their performance or penalizing them for poor performance lies solely with the Securities and Exchange
Commission of Pakistan (SECP), which is the apex regulator for the insurance sector.
Secondly, with respect to the argument that the Bidding Documents are based on international
precedents, we have found that with respect to performance securities, FIDIC does not, in any of its
contracts, place rating requirements on the providers of the guarantees/securities. Even otherwise, it
must be remembered that FIDIC remains a precedent on which PEC may rely to formulate engineering
contracts, but it cannot supersede the obligations which are binding upon PEC under the laws of
Pakistan.
In light of the above, it is apparent that not only is the rating requirement unfounded and baseless, but
that it also constitute restrictive trading conditions which have the object of preventing, reducing and
restricting competition in the relevant market in violation of Section 4(1) of the Act in terms of Section
4(2)( a) thereof.
No rational basis has been provided for the divergent treatment of banks and insurance companies. To
impose a further requirement therefore clearly amounts to the application of dissimilar conditions to
equivalent transactions, which have the effect of placing insurance companies at a competitive
disadvantage therefore, we find the Respondent to be in violation of Section 4(1) in terms of Section
4(2) (f) thereof.
DECISION:
In case of a violation of Section 4 of the Act, the Commission is empowered to impose a fine under
Section 38 of the Act and to issue appropriate remedial orders under Section 31. Pay a penalty ofPKR
15,000,000 (Pakistani Rupees Fifteen Million) for each of the two violations for a total of PKR 30,000,000
(Pakistani Rupees Thirty Million); and Amend the Impugned Provisions to remove the 'AA' rating
requirement and submit a compliance report to the Registrar to the Commission within 30 days; and c.
Refrain from similar practices in the future.
In the Matter of show cause notice issued to Pakistan Poultry Association (PPA).
Adjudicating members: Ms. Vaddiya Khalil, Dr. Shahzad Ansar & Mr. Ikram Ul Haque Qureshi
FACTUAL BACKGROUND:
The SCN was issued pursuant to the Competition Commission of Pakistan (the 'Commission') taking suo
mota notice of a series of newspaper advertisements regarding the rates of broiler chicken and chicken
eggs under Section 37 (1) of the Competition Act, 2010 (the 'Act). The main issue under consideration in
this matter is whether PPA has taken anti-competitive decisions in terms of Section 4(1) of the Act by
advertising the prices for broiler chicken and chicken eggs in newspapers, in prima facie violation of
Section 4(1) read with subsection (2) (a) of the Act. The Commission took notice of several newspaper
advertisements by PPA regarding the rates of a) live broiler chicken, b) broiler chicken meat (collectively
'broiler chicken') and c) chicken eggs. The advertisements appeared in the dailies 'lang', 'The News' and
'Nawae-Waqt'.
We, therefore, find that PPA is in violation of Section 4(1) read with Section 4(2) (a) of the Act in each of
the two relevant markets. 15. During the course of the proceedings, PPA submitted an undertaking
essentially stating that it had nothing to do with the fixing of poultry prices. The undertaking cannot in
any manner be construed as an offer of a commitment to remedy the violations that have taken place.
The undertaking has no admission on behalf of PPA and does not provide any substantial remedy to
remedy the violation. Therefore, there is no reason for the Commission to consider it.
DECISION:
The Commission in its previous order against the PPA had strictly reprimanded the Respondent and
ordered it to 'desist from taking any decision, even if merely suggestive in nature, regarding pricing,
production and sale of poultry products I. 6 The Respondent was also warned that the Commission
would not take a lenient approach in the future if any anti-competitive behaviour were to be detected.
17. In view of the above, we find the Respondent's actions to be in violation of Section 4(1) read with
sub-section 4(2) (a) of the Act with respect to two distinct relevant markets. The penalty imposed is as
follows:
Fifty Million Pakistani Rupees (PKR 50,000,000) for the violation in the market for broiler chicken; b. Fifty
Million Pakistani Rupees (PKR 50,000,000) for the violation in the market for chicken eggs; The
Respondent is therefore liable to pay a total penalty amounting to Hundred Million Pakistani Rupees
(PKR 100,000,000).
In the Matter of show cause notices issued to Pakistan Automobile

Manufacturers Authorized Dealers Association (PAMADA) & its member
undertakings
Adjudicating members: Ms. Vaddiya Khalil , Dr. Shahzad Ansar , Mr. Ikram Ul Haque Qureshi & Mr.
Mueen Batlay
FACTUAL BACKGROUND:
Pakistan Automobile Manufacturers Authorized Dealers Association ("PAMADA") and its member
undertakings, for prima facie violations under Section 4 of the Competition Act, 2010 (the "Act"). man.
Its members include dealers of all major automobile manufacturers, and it is the primary association of
authorized dealers of automobile manufacturers. It is important to clarify that while the Member
Undertakings represent dealers of auto manufacturers all across Pakistan, not all authorized automobile
dealers are members of PAMADA. On 4 June 2013, the Competition Commission of Pakistan (the
"Commission") received a letter informing it of a decision taken by PAMADA to increase the prices of
body repairs and paint jobs undertaken by its members. The Commission, taking notice of possible
violations of the provisions of Section 4 of the Act initiated an enquiry on 13 December 2013, under
Section 37 (1) of the Act.
Pursuant to the findings of the enquiry report, 44 show cause notices (‘SCNs’) were issued to the
Respondents for prima facie violation of Section 4 of the Competition Act 2010 (the ‘Act’). Violations by
the Respondents were primarily alleged in four different relevant markets i.e. (i) the market for new
automobiles in Pakistan, (ii) the market for automobile spare parts in Pakistan, (iii) the market for
automobile body repairs and paint jobs, and (iv) the market for experienced sales and technical staff at
authorized automobile dealers in Pakistan.
ANALYSIS:
The Commission dealt with the liability of PAMADA separately from that of its member undertakings
and found that PAMADA had issued two circulars fixing the rates of automotive body repairs and paint
job services offered by it, one circular fixing the prices of genuine spare parts supplied by its member
undertakings by strictly prohibiting them from offering discounts and lastly, a circular restricting the
movement of human resources between automobile dealers. The issuance of these circulars was found
to amount to decision-making by an association, which is prohibited under the Act.
With regards to a violation in the market for sales of new automobiles, the Commission did not find the
evidence available sufficient to hold PAMADA liable.
Finally, in consideration of the responses submitted by the member undertakings during the course of
hearings, and upon the evidence available, the Commission did not find them to have implemented the
decisions taken by PAMADA in violation of Section 4 of the Act.
DECISION:
In view of the violations made out, the Commission directed PAMADA to cease its collusive practices and
imposed the following penalties:
(i) Rupees Fifty Million each for two violations in the market for body repairs and paint jobs;
(ii) Rupees Twenty Five Million for a violation in the market for genuine spare parts; and
(iii) Rupees Fifteen Million for a violation in the market for human resources.
PAMADA is therefore liable to pay a total sum of Rupees One Hundred and Forty Million. Furthermore,
PAMADA and its members have been strictly warned to refrain from cartelization collusive behavior in
the future at the risk of severe penal consequences.
It is important to stipulate here that associations of undertakings have the ability to effect advantageous
changes for their members at the policy level. These associations are at liberty to take decisions
regarding industry related and policy matters at the governmental level, such as PAMADA itself has also
been in the practice of doing. Undertakings must remember, however, that working together is always
to be considered a precarious line to walk. Where any commercially sensitive information is being
exchanged, undertakings are already in the realm of anti-competitive behavior, which is being more
strictly scrutinized and penalized the world over.
LDI Operators Order – pursuant to the order of Honourable Supreme Court of

Pakistan
Adjudicating members: Ms. Rahat Kaunain Hassan, Dr. Joseph Wilson Member & Dr. Shahzad Ansar
FACTUAL BACKGROUND:
This order disposes of the proceedings under Section 30 of the Competition Act, 2010 (the “Competition
Act”) vide Show Cause Notice Nos. 1 to 14/2013 to Long Distance & International (LDI)
telecommunication service operators (“LDI Operators”). All the LDI Operators are engaged in the
provision of LDI telecommunication services being terminated in Pakistan which is the relevant market1
in this instant case. Hence, LDI Operators are undertakings in terms of the provisions of clause (q) of
subsection (1) of Section 2 of the Competition Act.
There are 14 companies licensed by Pakistan Telecommunication Authority (PTA) to operate as Long
Distance & International (LDI) telecommunication service operators. The LDI Operators, had earlier
applied vide application dated 09-09-2011 for an exemption under Section 5 of the Competition Act
from the application of Section 4 of the Competition Act for their then proposed International Clearing
House Agreement.
The Commission after examining the facts mentioned and grounds taken in the Representation and also
the arrangement among the LDI Operators under the ICH Agreement proceeded to issue the Show
Cause Notices to all the LDI Operators under Section 30 of the Competition Act in compliance with the
Order of the Hon’ble Supreme Court.
ISSUES:
i. Whether the Commission can determine the scope of its own jurisdiction? If so, whether the
Commission has jurisdiction in the subject matters?
ii. Whether condition of enquiry is a pre-requisite for initiating proceedings under Section 30
of the Competition Act?
iii. Whether the impugned ICH Agreement violates any provision of Competition Act, 2010 as
alleged in the show cause notices?
iv. Whether the Policy Directive of the MoIT accords immunity from liability to the
respondents under the Competition Act?
ANALYSIS:
The excerpt highlights the conduct of LDI (Long Distance and International) Operators regarding their
exemption application and the ICH (International Clearing House) agreement. Despite being advised by
the Ministry of Information Technology (MoIT) that the Commission is not the competent forum, LDI
Operators withdrew their exemption application. However, they later asserted before the Supreme
Court and Sindh High Court that the Commission should have jurisdiction over the matter, contradicting
their earlier stance. The excerpt suggests that the objections raised by LDI Operators appear to be
tactical and unwarranted, given their inconsistent behavior regarding the jurisdiction of the Commission
and the courts.
There is nothing unlawful to proceed under Section 30 of the Competition Act and to issue notices to the
LDI Operators to show cause as to why an appropriate order should not be passed against them.
Therefore, hold that the issuance of the show cause notices to the respondents without holding an
enquiry was in accordance with the provisions of Competition Act.
It is difficult to appreciate that on what premise the existing players would let go of their shares to
accommodate a new player. In any event, the ICH Agreement would disallow a new player from actually
competing in the market, as its own share would be fixed by its potential competitors. Hence it would
not be able to exert any competitive pressure in the market. The fact that the ICH Agreement is
indefinite only exacerbates the situation. Thus, the violation of Clause (d) of Sub section (2) of Section 4
of the Competition Act is clearly made out on part of LDI Operators.
The pernicious nature of the ICH arrangement, its harmful effects on the telecom sector, consumers and
the economy in general which must be condemned and cannot be condoned at any cost.
DECISION:
In view of the foregoing and having established the contravention of clauses (a), (b) and (d) of sub
section (2) of Section 4 of the Competition Act on part of all the LDI Operators which are viewed as hard
core violations, there is no doubt that the ICH Agreement is void in terms of subsection (3) of Section 4
of the Competition Act.
The excerpt details the outcome of a regulatory action against Long Distance and International (LDI)
Operators in Pakistan regarding the International Clearing House (ICH) Agreement. The ICH Agreement
has been annulled, and LDI Operators are instructed to cease prohibited practices and are reprimanded
against similar future behavior. The Pakistan Telecommunication Authority (PTA) is advised to restore
competition among LDI Operators.
Although there was apparent involvement of the Ministry of Information Technology (MoIT) and PTA in
the establishment of the ICH (albeit without legal effect), the LDI Operators are held liable for their
deliberate violation of competition laws. A penalty equivalent to 7.5% of the annual turnover is imposed
on each LDI Operator for the last financial year 2012, with specific amounts mentioned for some
operators. Other operators are directed to submit their annual turnover to the Commission within 10
days. Failure to comply will result in additional penalties.
Additionally, for non-compliance with a previous order, all LDI Operators are held liable to pay a penalty
of PKR 1,000,000. Aggrieved parties can claim compensation from LDI Operators for any loss resulting
from illegal gains under the ICH Agreement. The excerpt concludes by emphasizing the importance of
the telecom sector in Pakistan's economy and condemns anticompetitive conduct, stating that such
behavior has a devastating impact on the economy.
In the Matter of show cause notice issued to Institute of Chartered Accountants

of Pakistan (ICAP) Order
Adjudicating members: Ms. Rahat Kaunain Hassan, Mr. Abdul Ghaffar & Dr. Joseph Wilson
FACTUAL BACKGROUND:
This order shall dispose of the proceedings initiated pursuant to the Show Cause Notice No 105/2012
dated 17 September 2012 (the „SCN‟) issued to the Institute of Chartered Accountants of Pakistan
(ICAP) for the prima facie violation of Section 4 of the Competition Act, 2010 (the „Act‟).
The Show Cause Notice (SCN) against the Institute of Chartered Accountants of Pakistan (ICAP) was
primarily based on a directive issued on 4 July 2012 (referred to as the "July Directive"). This directive
prohibited ICAP members and chartered accountant firms from training non-ICAP accountancy students,
potentially violating Section 4 of the Act by restricting competition. ICAP argues, among other grounds,
that a subsequent directive dated 24 October 2012 (referred to as the "October Circular") narrowed the
prohibition to only apply to members and firms approved as training organizations by ICAP. ICAP asserts
that this clarification renders the SCN baseless, as the restriction now applies only to a specific subset of
members and firms.
ISSUES:
1. Whether the July Directive issued by ICAP can be termed as a decision of an association of
undertakings?
2. Whether with the issuance of the October Circular, the SCN has lost its basis?; and if not
3. Whether the July Directive, read with the October Circular, is a decision in relation to provision
of services and is anti-competitive in terms of Section 4 of the Act?
ANALYSIS:
The Commission analyzed whether the Institute of Chartered Accountants of Pakistan (ICAP) acted as an
association, using a two-step methodology: determining if the members are undertakings and assessing
the nature of the association's decisions. After reviewing ICAP's structure and activities, the Commission
concluded that when ICAP issued the July Directive, it acted as an association of undertakings, and this
directive violated Section 4 of the Act.
The Commission identified the relevant product market as the provision of professional training to
students pursuing membership in domestic or foreign accountancy bodies, with the relevant geographic
market being Pakistan.
The July Directive was found to exclude a significant and valuable segment of the market—public
practice accountancy firms—from providing training to non-ICAP students. The Commission noted that
training at such firms offered a unique and valuable experience not easily substituted by other forms of
training, such as in-house training at commercial concerns in the public or private sector.
DECISION:
As for the penalty and remedy under Act, taking into consideration all the above facts and circumstances
including: the relevance of the accountancy profession for businesses, keeping in view that the subject
matter pertains to a professional body, bearing in mind that such practices are to be strongly
condemned and discouraged in the interest of justice we hereby:
A. hold and declare the July Directive and October Circular to be in violation of Section 4 of the Act and
to be without any legal force. Accordingly, the subject accountancy firms are free to engage non-ICAP
students as interns/trainee;
B. impose a penalty of PKR 25 Million on ICAP; and
C. restrain ICAP, from issuing similar directives/circulars in future having the effect of barring its
approved training organizations from engaging non-ICAP students for training.
In the event that ICAP continues the subject practice in violation of this order, it will be liable to pay a
penalty of PKR 1 Million everyday for such violation in terms of Sub-Section 3 of Section 38 of the Act.
In the Matter of Complaint filed by Pakistan Overseas Employment Promoters

Association (POEPA) against G.C.C Approved Medical Centers Administrative
office (GAMCA) and GCC Approved Medical Centers Order
Complainant: Competition Commission of Pakistan & Pakistan Overseas Employment Promoters
Association-(POEPA)
FACTUAL BACKGROUND:
This order will address the proceedings related to Show Cause Notices No. 1-25 of 2012, which were
issued to the GCC Approved Medical Centers Administrative Offices (referred to as 'GAMCA') and the
GCC Approved Medical Centers (referred to as 'GAMCs') operating in Islamabad/Rawalpindi, Karachi,
Lahore, Peshawar, and Multan. These centers are accused of prima facie violating Sections 3 and 4 of
the Competition Act, 2010.
POEPA is a representative body of the overseas promoters in Pakistan. POEPA is licensed by Ministry of
Commerce under the Trade Organization Ordinance, 2007 and is also registered under the Companies
Ordinance, 1984. The GAMCs are approved, licensed and authorized by the Executive Board, Health
Ministers Council for GCC States to conduct pre-departure medical examination of the intending
emigrants to GCC Countries (i.e. Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates).
GAMCA is the coordinating office for GAMCs established in the regions/cities of Islamabad/Rawalpindi,
Karachi, Lahore, Peshawar and Multan.
POEPA filed a Complaint with the Competition Commission of Pakistan (the ‘Commission’) against the
Respondents. It was alleged in the complaint that GAMCs working under their respective GAMCA have
cartelized to allocate the intended emigrants to the GCC States (hereinafter the ‘GCC Customers’)
among themselves on equal basis. Such allocation of customers falls, prima facie, under the
arrangement/agreement prohibited under Section 4(2)(b) of the Act. It was also alleged that GAMCA has
divided the territory of Pakistan for provision of services of pre-departure medical tests into five (5)
regions, namely; Karachi, Multan, Peshawar, Islamabad/Rawalpindi and Lahore, which appears in
violation of Section 4 (2)(b) of the Act. Further, GAMCAs are equally distributing the number of GCC
Customers for pre-departure medical tests to the GAMCs operating within their region, which is, prima
facie, violation of Section 4(2)(c) of the Act. And finally that the anti-competitive behavior of the
Respondents affects the GCC Consumers who are forced to pay exorbitant fixed charges of the GAMCs,
prima facie, in violation of Section 4(2)(a) of the Act. The GCC Customers are also unable to get their
medical check-ups from a medical center of their suitability. Ironically, after the arrival of the GCC
Customers in the GCC States for employment, they have to undergo the same medical tests again, thus
paying twice for the same tests.
ISSUES:
(i). Whether or not the Respondents are conducting an economic activity and fall within the purview of
‘Undertaking’ in terms of clause (q) sub-section (1) of Section 2 of the Act?
(ii). Whether the Executive Board, GAMCAs & GAMCs constitute ‘single economic entity’ as the
Respondents are acting as an auxiliary arm/ agent of the Executive Board, therefore, the provisions of
competition law are not applicable on them?
(iii). Whether the conduct under review qualifies itself as a ‘foreign sovereign compulsion’ or ‘Act of
State’ and the provisions of competition law are not applicable on them?
(iv). Whether the fixing of fee for pre-departure medical check-ups by GAMCs constitutes a violation in
terms of clause (a) of sub-section (2) of Section 4 of the Act?
(v). whether the division of markets and equal allocation of the GCC Customers for pre-departure
medical check-ups by the Respondents constitutes a violation under clause (b) & (c) of sub-section (2) of
Section 4 of the Act?
ANALYSIS:
The Respondents argued that since they do not engage in economic activities, the Competition Act does
not apply to them. However, this argument is countered by the fact that they are indeed involved in
economic activities, as detailed in the preceding paragraphs. Therefore, they are considered
'undertakings' under clause (q) of sub-section (1) of Section 2 of the Act, specifically in the relevant
market of 'pre-departure medical tests for intended immigrants/expatriates to the GCC Countries'
except the United Arab Emirates in Pakistan. This conclusion aligns with the observation and
determination of the relevant market in the Enquiry Report.
There is nothing available on the record to suggest that the GAMCs are not engaged in provision of
other similar type of health care services. The counsel appearing on behalf of the Respondents has also
conceded that the Respondents are engaged in provision of other health care services. It has also not
denied that the fee charged by the GAMCs are not reimbursed to the Executive Board after making
deduction of “commission”, in fact the beneficiary for the entire fee charged is solely GAMCs. Hence, we
are of the considered view that the relation of ‘principal’ and ‘agent’ does not exist between the
Executive Board, GAMCAs and GAMCs.
During the inquiry, it was noted that GAMCAs promptly informed the Executive Board about the
decision of the DG Trade Organisations-Ministry of Commerce and Trade to omit the word 'Association'
from the name 'GCC Approved Medical Centre Association'. This was rectified by changing the name to
'administrative office' as directed by the Executive Board. However, there is no record of communication
to the Executive Board or any effort made to address the alleged contraventions related to competition
concerns throughout the year-long inquiry. The only communication on record to the Executive Board
came much later, after the issuance of Show Cause Notices to the Respondents. Based on these
observations, it is concluded that the conduct under review in the proceedings does not qualify for
'foreign sovereign compulsion' or 'Act of State'.
It is recognized that the medical tests conducted by GAMCs are mandatory/necessary services for GCC
Customers and are only carried out by accredited medical centers. Without a prescribed fee ceiling,
GAMCs could potentially charge exploitative rates, especially considering the clientele they serve.
Setting an upper fee ceiling would introduce competition among GAMCs regarding fees and incentivize
them to improve efficiency and service quality. This approach allows for more price flexibility compared
to a fixed price system.
However, it is important to note that setting an upper fee ceiling requires prior approval/exemption
from the Commission. Given the circumstances of this case, no penalty is imposed regarding this
practice. Instead, the Respondents are directed to file an exemption application with the Commission's
Registrar within thirty (30) days from the communication of this Order.
Recognizing that the Commission has the responsibility of endeavoring to prevent or eliminate anti-
competitive behavior on the part of economic agents that adversely impacts the rights of the general
public. For reasons and precedents discussed above, we consider such practice and conduct of the
Respondents clearly violate of clause (b) & (c) of sub-section (2) of Section 4 of the Act and warrants
imposition of penalty.
DECISION:
The Respondents have engaged themselves into an arrangement which is as per well settled principles
considered per se illegal. As per the record, the system of ‘pre-departure medical tests’ was put in place
since 2000. The competition law has been in force in Pakistan since October 2007 and the Respondents
even after the introduction of the competition law, made no effort for rectifying their behavior. Clearly,
such illegal practices /activities continued for over a period of four (4) years. Even during the
proceedings while the Respondents have taken great pains to justify the market division and equal
allocation of GCC Customers, no effort was made by the Respondents to work towards compliance.
PKR 10 Million on each GCC Approved Medical Centers Administrative Officer i.e. GAMCA
Islamabad/Rawalpindi, GAMCA Karachi, GAMCA Lahore, GAMCA Peshawar and GAMCA Multan.
Each of the GAMCs are further directed to file an application for exemption of the ‘maximum fee ceiling’
prescribed by the accreditation granting authority (the Executive Board) within thirty days (30) from the
date of communication of this Order.
In the Matter of 1-Link Guarantee Ltd and its Member Banks Order
FACTUAL BACKGROUND:
The Competition Commission of Pakistan (the “Commission”) took notice on its own of ATM cash
withdrawal charges implemented by banks in Pakistan. It was observed that banks are charging uniform
amount of Rs.15 for ATM cash withdrawal transaction despite having non- uniform business dynamics
regarding the aforesaid service.
During preliminary fact finding it was found that in Pakistan ATM cash withdrawal service is provided by
two ATM networks/switch namely: 1-Link and Mnet. The State Bank of Pakistan has mandated that all
commercial banks in Pakistan, both foreign and domestic, have to become members of one or the other
switch to provide ATM services to their own customers as well as customers of other banks.
Additionally, these two switches have been interconnected in 2006, which means that a consumer
holding an ATM or debit card issued by any bank in Pakistan may use any ATM located throughout the
country.
Pursuant to the powers contained in Section 28(2) of the Act, the Commission appointed Enquiry
Committee to conduct an enquiry as to whether 1-Link and member banks are involved in collusive
activities to fix the rates of services provided by them, thereby violating Section 4 of the Act, and to
prepare a detailed Enquiry Report under Section 37 of the Act.
ISSUE:
i. Whether the relevant market and sub-sets thereof have been rightly defined/identified in
the Enquiry Report?
ii. ii. What is the role of SBP with respect to fee charged to customer for ATM cash withdrawal
transaction and UBPS?
iii. iii. Whether fixing of inter-change fee in respect of ATM cash withdrawal and IBFT services is
per se violation of Section 4 of the Act or qualifies for exemption in terms of Section 5 read
with Section 9 of the Act?
iv. iv. Whether fixing charges for UBPS is per se violation of Section 4 of the Act or qualifies for
exemption in terms of Section 5 read with Section 9 of the Act?
v. v. Whether the ATM cash withdrawal fee in the sum of PKR15 uniformly charged by 1-Link
member banks to their customers for inter- bank transactions amounts to collusive price
fixing or is merely a parallel behavior?
ANALYSIS:
The Enquiry Committee completed the Enquiry by submitting the Enquiry Report on 09 December, 2011.
The Enquiry Report concluded that ‘1-Link Agreement’ among founding members appears to fix the
charges of inter-bank ATM cash withdrawal which the other network parties/members have acceded to
by signing an Accession Memorandum. The Enquiry Report also concluded that member banks have
signed Accession Memorandum to ‘1-Link Agreement’ among founding members and to ‘UBPS
Agreement’ and ‘IBFT Agreement’ entered into by 1-Link on behalf of its members and have also
implemented the uniform charges as per the schedule of charges issued by 1-Link. Such decisions on
price fixing by 1-Link, and price fixing agreements entered into by member banks, prima facie, have the
object or effect of restricting, reducing or preventing competition within the relevant market in
contravention of Section 4(1), in particular, Section 4(2)(a) of the Act. Therefore, the Enquiry Report
recommended it necessary, in the public interest to initiate proceedings against 1-Link and its member
banks under Section 30 of the Act. Based on the findings of Enquiry Report, CCP issued show cause
notice to 1-Link and Member Banks.
In its analysis, the Commission considered various issues. On the issue of the relevant market, the
Commission dispelled the objection by the undertakings and restricted the relevant market to cash
withdrawal at ATM and excluded withdrawals through conventional banking./P>
On the issue of the role of SBP with respect to fee charged to the customers, the Commission found that
SBP had set a price ceiling. Moreover, on the issue of whether fixing the fee violates Section 4 and
qualifies for exemption under Section 5, the Commission noted that “a price fixing agreement, albeit has
been declared unreasonable restraint, may be considered under rule of reason when parties collaborate
like a joint venture for creating significant and beneficial efficiencies that could not other be
accomplished” thereby relying on the rule of reason as opposed to a per se analysis. The Commission
noted that there were various benefits of the arrangement and “requiring the network parties to have
bilateral agreement for the sake of competition would come about at the cost of technical efficiency,
higher costs, impediment to growth in the banking industry and benefit to consumers both in terms of
affordability and wide access to ATMs.” As such, the arrangement was capable of meeting the
exemption criteria.
On the issue of price fixation in utility payments, the Commission again noted that this was introduced
under the direction of the SC and the regulation by SBP has also proven beneficial for the market at a
reasonable cost making it a case fit for exemption. In furtherance thereof, the Commission granted
individual exemption to the bank to bank fee for ATM withdrawal agreement and the IBFT agreement.
As regards the UBPS agreement, it directed 1 Link to seek exemption regarding the same. Lastly, on the
issue of whether the uniform withdrawal fee by banks is a prohibited agreement of parallel behavior,
the Commission ruled that 1 Link had gone beyond its mandate and ensured that the ceiling was in fact
the uniform price charged by all member banks which violates Section 4.
DECISION:
The Bench found that 1-Link, a banking consortium, exceeded its mandate by engaging in commercial
activities, such as determining customer/cardholder charges, which should have been left to individual
banks. 1-Link acted more like an association of member banks, providing a forum for discussion and
decision-making, with member banks implementing the decisions made by the Board. This collective
behavior, particularly in setting uniform fees for 'Off Us' ATM cash withdrawals, violates Section 4(1)
read with Section 4(2)(a) of the Act.
Additionally, the Bench noted that despite financial liberalization and deregulation in Pakistan's banking
sector, the sector's efficiency lags behind that of some developed countries and even countries like India
and Bangladesh. For example, Pakistan's banking spread is 8.12%, compared to 0.92% in India and 5.90%
in Bangladesh.
The Competition Commission of Pakistan (CCP) imposed a total penalty of PKR 770 million for imposing
uniform customer charges for Off-Us ATM cash withdrawal transactions, in violation of Section 4 of the
Competition Act, 2010. The penalty breakdown is as follows:
- PKR 50 million on 1-Link (Guarantee) Limited
- PKR 50 million each on its 11 founding member banks: National Bank of Pakistan, Allied Bank Limited,
Habib Bank Limited, Bank Al-Falah Limited, Askari Bank Limited, Soneri Bank Limited, NIB Bank Limited,
United Bank Limited, Standard Chartered Bank Pakistan Limited, Faysal Bank Limited, and Bank AL Habib
Limited
- PKR 10 million each on its 17 non-founding member banks: Albaraka Bank Pakistan Limited, Burj Bank
Limited, Meezan Bank Limited, Bank Islami, Khadim Ali Shah Bukhari Bank Limited, Habib Metropolitan
Bank Limited, The Bank of Khyber, Dubai Islamic Bank Pakistan Limited, JS Bank Limited, Silk Bank
Limited, The Bank of Punjab, Samba Bank Limited, Sindh Bank Limited, Barclays Bank PLC Pakistan
Limited, Tameer Microfinance Bank Limited, Kashf Micro Finance Limited, and Summit Bank Limited.
It's noted that Citi Bank was not penalized as it did not follow the collective behavior of charging a
uniform fee for Off-Us ATM transactions.
Withdrawal of Complaint filed by ELTEK VALARE A.S Order

Complainant: Competition Commission of Pakistan & M/s Eltek Valere AS
Adjudicating members: Mr. Abdul Ghaffar Member (Cartels & Trade Abuses)
FACTUAL BACKGROUND:
This Order will dispose of the complaint filed by M/s Eltek Valere AS (hereinafter referred to as the
‘Complainant’); against the issuance of the exemption certificate dated 11-02-2011 to the Mr.
Mohammad Tariq and Mr. Imran Saeed (hereinafter referred to as the ‘Respondents’).
The Complainant alleged that they, in collaboration with the Respondents, formed a company named
M/s Nextra Communications (Pvt.) Limited, which later became Eltek Valere Pakistan (Pvt.) Limited
(referred to as the 'Joint Venture'). The Complainant held a majority share of 51%, while the
Respondents collectively held 49% in the Joint Venture. However, the Respondents did not inform the
Complainant, as the majority shareholder, about filing an application on 10-02-2011 for exemption from
the Competition Commission. The Complainant further alleged that the Respondents obtained the
exemption by filing an application that did not comply with the provisions of Regulation 4(1) of the
Competition Commission (General Enforcement) Regulation, 2007, and the Schedule thereof.
Specifically, it was claimed that the requirement in Para 1.5 of the Form, which necessitates informing
affected parties about the application for exemption, was not met.
DECISION:
Hearing was scheduled in the matter; however, in response thereof Mr. Colin Howe, Chief Executive
Officer of the Complainant informed the Commission vide facsimile letter dated 31-08-2011 that they do
not wish to pursue the complaint and the same may be treated as withdrawn. It was also sated therein
that they have instructed their advocates to write to the Commission in this regard. Consequently, the
Counsel for the Complainant vide their letter dated 01-09-2011 seconded the stance earlier taken by the
CEO of the Complainant and informed the Commission that their client no longer wishes to pursue the
complaint, therefore, the same may be treated as withdrawn.
The request of withdrawal of the complaint was accepted and the matter was disposed off accordingly.
Pakistan Vanaspati Manufacturers Association Order

Adjudicating members: Ms. Rahat Kaunain Hassan & Mr. Abdul Ghaffar
FACTUAL BACKGROUND:
Through this order the Competition Commission of Pakistan (the ―Commission) shall dispose off the
proceedings initiated under Section 30 of the Competition Act, 2010 (the ―Act) vide Show Cause Notice
No. 04/2011 dated April 27, 2011 against Pakistan Vanaspati Manufacturers Association (PVMA). The
principal issue in this case is whether PVMA has taken any decision to fix the price of ghee and cooking
oil and has entered into an arrangement with transporters to fix the rates of transportation of edible oil
in contravention of Section 4 (2) (a) of the Act and whether PVMA designated for invoice verification is
discriminating between manufacturing units and commercial importers by charging two different rates
in contravention of Section 3(3)(b) of the Act.
ISSUES:
a. Whether there has been any violation of Regulation 45(2) of the Competition (General Enforcement)
Regulations, 2007?
b. Whether a decision of an association with respect to price fixing notwithstanding its

recommendatory/advisory nature and its implementation by the members constitutes violation under
c. Whether the arrangement entered into by PVMA with respect to fixing rate of transportation is in
violation of Section 4 of the Act?
d. Whether PVMA in discharging the services of invoice verification is discriminating between its
customers by charging two different rates for the same service in contravention of Section 3(3)(b) of the
Act?
ANALYSIS:
We have before us Section 4 of the Act which prohibits decision of an association in respect of the
production, supply, distribution, acquisition or control of goods or the provision of services which has
the object or effect of preventing, restricting or reducing competition within the relevant market. An
association becomes liable for violation of Section 4 if its decision has the object to restrict competition
in the relevant market. Adopting the interpretation of legal representative of PVMA of Regulation 45 of
the Enforcement Regulation, the Commission will have to exempt association from the Section 4 even if
its decision is in sheer violation of the Section 4 unless more than its 20 members are found, involved in
any anti-competitive activity.
Recommendations of PVMA were actually implemented or not, these clearly fall under the decision of
an association‘ having an object or effect to restrict, reduce or prevent competition in relevant market
which is prohibited under Section 4 of the Act. In any event, PVMA has failed to establish that
recommendations of PVMA were only advisory in nature and were never actually acted upon by its
members. In fact evidence before us proves it, beyond any doubt, that price decisions taken by PVMA
were actually implemented. PVMA agreed and decided to trim down the ghee price from 120 per kg to
Rs.98 per kg and then finally at Rs.86 per kg within three months (26th September 2008 to 15th
December 2008). It clearly shows that during these three months member that manufacturing
mills/units actually implemented the decisions of PVMA to fix the price.
The current case involves an allegation against PVMA for violating Section 4 of the Act. The case will be
decided based on the available facts and submissions by PVMA. However, due to the complexity of the
issue and the need for further investigation, no determination can be made until all parties involved are
thoroughly examined. If any adverse finding is made regarding a prima facie violation under the Act, the
Commission may proceed against the parties according to the law.
We do not find merit in the argument that PVMA‘s excessive charge is justifiable as it facilitates
commercial importers for their invoice/price verification and helps them avoid waiting for long hours
enabling them to pay all costs and obtaining clearance. The service rendered to the members is on
equivalent footing and price of rendering such services should not, therefore, be discriminatory. We
hereby hold that disparity of rates charged by PVMA from members and commercial importers
importing the same product, is in contravention of Section 3(3)(b) of the Act.
DECISION:
In order to deter the undertaking from engaging in anti-competitive practices and to reflect the
seriousness of the infringement i.e. price fixing, for the contravention of Section 4 of the Act, we hereby
impose a penalty of PKR 50 million which PVMA is liable to deposit within 30 days of issuance of this
Order. PVMA is further reprimanded not to indulge in any anti-competitive practice in future,
However, as for the violation of Section 3(3)(b) of the Act, we are hereby directing PVMA to cease the
practice of charging discriminatory rates forthwith and to implement similar rates/charges/fee for
invoice verification from manufacturers/members and commercial importers/non-members. PVMA is
further directed to report compliance within a period of 30 days of issuance of this Order. Failure to
comply with this direction shall make PVMA liable for a penalty in the sum of PKR 1 million for each day
default.
Implementation agreement entered into between PQA and EVTL

Adjudicating members: Ms. Rahat Kaunain Hassan Dr. Joseph Wilson Ms. Vadiyya S. Khalil
FACTUAL BACKGROUND:
Through this order the Competition Commission of Pakistan (the “Commission”) shall dispose off the
proceedings initiated under Section 30 of the Competition Act, 2010 (the “Act”) vide Show Cause Notice
No.23/2010 dated July 06, 2010 (SCN) against Port Qasim Authority (PQA) and M/s Engro Vopak
Terminal Limited (EVTL) for entering into a prohibited agreement and also the Exemption Application
(File No. 2/(192)/AGR/Exm/Reg/CCP/2010) filed by PQA under Section 5 of the Act during the course of
subject proceedings.
The primary issues in this case are whether the exclusive rights granted to EVTL through a concessionary
agreement entered into by and between PQA and EVTL to handle and store all liquid chemicals and
gaseous liquid chemicals (except for LPG) entering the Port Qasim area (PQ area) domain/area, have an
object or effect to prevent, restrict and distort competition within the relevant market, thereby violating
Section 4(1) read with sub-section (2) (a) & (d) of Section 4 of the Act; and whether the request for
exemption for the said concession agreement can be granted in terms of Section 5 read with Section9 of
the Act.
The Commission on its own took notice of an Implementation Agreement (the “Implementation
Agreement”) executed on February 18,1996 by and between PQA and EVTL (then known as Engro
Paktank Terminal Limited or EPTL) for setting up of integrated liquid chemical terminal and storage farm
at South Western Zone of Port Qasim. The Implementation Agreement grants EVTL an exclusive right for
thirty (30) years, extendible to another thirty (30) years, to handle and store all liquid chemicals and
gaseous liquid chemicals (except for LPG) entering the PQA area.
ISSUES:
a) What is the relevant market?
b) Whether the Implementation Agreement entered into between PQA and EVTL before the
promulgation of the Act falls within the purview of Section 4 of the Act and qualifies exemption under
c) Whether the request for exemption for the Implementation Agreement can be granted in terms of
Section 5 &9 of the Act?
ANALYSIS:
The settled principle of interpretation and reading the document as a whole, we find that this aspect of
jetty being part of the relevant market was expressly envisaged in the same paragraph. In line 2 of the
above quoted paragraph it is stated that “The relevant product market for the purposes of this Show
Cause Notice is a market for the supply of storage services for liquid chemicals entering a port. Such
storage services are provided through a purpose built storage terminal and a chemical jetty constructed
to handle specific kinds of chemicals.” As for the last two lines of the above quoted paragraph
“Accordingly the relevant market is the terminal for providing storage services for liquid chemicals in the
PQA area” we are of the view that since the sentence begins with the word „accordingly‟ the
proceedings contents of paragraph must be taken into account. Furthermore, the contents of the
preceding Para 5 also consolidate the position that relevant market envisages in its scope facility of
handling and storage in the following words: Whereas, the Agreement grants EVTL the exclusive
concessionary right to handle and store all liquid chemicals and gaseous liquid chemicals (except for LPG)
entering the PQA area.
Having addressed the objection raised by EVTL and PQA, we are of the view that the Implementation
Agreement impugned in the proceedings before the Commission falls within the purview of the
prohibited agreement in terms of Section 4 and the parties were liable to seek exemption in terms of
Section 4 read with Section 5&9 of the Act. However, the contravention of Section 4 of the Act is being
determined after the commencement of the Competition Law and not from the date of signing of the
Implementation Agreements, hence, question of retrospective application of law is not relevant.
DECISION:
PQA is given three months to report to the Commission on the measures taken to comply with the
directions given. Proposed provisions addressing the concerns raised must be submitted within the next
three months for clearance by the Commission. These provisions must be incorporated into the
Implementation Agreement no later than three months from the issuance of the Commission's findings.
Failure to comply may result in the cancellation of the exemption, and a penalty of Rs. 1 million per day
may be imposed for each violation.
PQA is directed to expedite the exemption process for all terminals with exclusive concessionary rights.
The Cartel and Trade Abuse department of the Commission is directed to take necessary action
regarding other terminals with exclusive concessionary rights.
The Implementation Agreement is found to violate Section 4 of the Act and falls under 'prohibited
agreements,' requiring exemption under Section 5 read with Section 9 of the Act. A penalty of Rs. 10
million is imposed on EVTL for failing to comply with the Implementation Agreement, with additional
penalties for non-compliance with the Commission's directions. EVTL is not entitled to lenient treatment
due to the clear language of the Implementation Agreement.
Pakistan Ship's Agents Association Order

Complainant: Competition Commission of Pakistan & Pakistan Paper Merchant’s Association
(hereinafter ‘PPMA’)
Adjudicating members: Mr. Abdul Ghaffar, Dr. Joseph Wilson & Mr. Mueen Batlay
FACTUAL BACKGROUND:
In March 2010, the Competition Commission of Pakistan (the ‘Commission’) was alerted to possible
violation of sub-section (1) of Section 4 read with clause (a) of sub-section (2) of the Competition Act,
2010 (the ‘Act’). It took appropriate action and subsequently under Section 30 of the Act issued show
cause notice no 02 of 2011 dated 14 February 2011 to Pakistan Ship Agents Association (hereinafter
‘PSAA’). The Commission has heard PSAA and considered its submissions to decide whether PSAA had
fixed prices for ancillary services provided by its members, the ship agents, in violation of sub-section (1)
of Section 4 read with clause (a) of subsection (2) of the Act.
PSAA is the sole licensed trade association for shipping agents comprising of approximately 70 members
handling vessels calling at Pakistani Ports. PSAA qualifies as an undertaking as defined in Section 2 (1) (q)
of the Act.
The Pakistan Paper Merchant’s Association (PPMA) informed the Commission, through letters dated 9
March 2010 and 12 May 2010, about potential collusive practices by the Pakistan Ship Agents
Association (PSAA) regarding the determination of ancillary charges for shipping services imposed by
various ship agents.
PPMA alleged that PSAA might be involved in setting charges for ancillary shipping services provided by
its members, such as charges for export documentation, port of discharge release, security, and other
inter-modal facilitation. In response to the Commission's inquiry, PSAA stated on 6 July 2010 that it did
not determine ancillary charges but recommended a range to guide its members.
The Commission appointed Ms. Shaista Bano, Director, and Mr. Syed Umair Javed, Deputy Director, as
Enquiry Officers under Section 33 of the Act to investigate. They were also authorized under Section 34
of the Act to conduct a search and inspection of PSAA's premises in Karachi to gather further
information. After searching the premises on 7 January 2011, the Enquiry Officers reported to the
Commission on 1 February 2011 that there was prima facie evidence of a violation of Section 4 of the
Act by PSAA and its members. The Enquiry Report recommended that the Commission take action
against PSAA under Section 30 of the Act.
ISSUES:
(a)The Pakistan Ship Agents Association (PSAA) is, prima facie, involved in collecting information on
ancillary charges from its members, deciding on a range of recommended ancillary charges, and
circulating these to members and stakeholders. PSAA also appears to make membership contingent
upon subscribing to this recommended range.
(b)Prima facie, PSAA deliberates and decides on a range of charges for ancillary services to be followed
by its members, the ship's agents. This action amounts to taking a decision to fix prices of services
offered, violating sub-section (1) of Section 4 read with clause (a) of sub-section (2) of the Act.
(c)Furthermore, PSAA members, by providing information on the pricing of their services to PSAA and
deliberating to arrive at a generally acceptable price range, have prima facie entered into an agreement
among themselves and PSAA concerning price fixing, violating Section 4(1) read with Section 4(2)(a) of
the Act.
ANALYSIS:
The documents found during the search of PSAA’s premises that have been listed in Section 7 of this
Order establish that PSAA did engage in the practice of regularly circulating a range of charges for
ancillary services of ship’s agents. This does amount to fixing the selling price of the provision of a
service, as described in clause (a) of sub-section (2) of Section 4 of the Act.
The undertaking, inter alia, took the defense that all documentary evidence was dated before the
provision of the Act and as such, the Act was not applicable. This was dispelled by the Commission by
tracing out the validation clause in Section 62. On the question of pressure from trade organizations, the
Commission held this is no defense to act outside of the law. On the question of state action
compulsion, the Commission held that none of the conditions outlined in the Commission’s KSE, LSE and
ISE order were met. Although the Commission did find the pressure from state intervention but no
binding rules were promulgated as a mitigating factor.
DECISION:
We hold that PSAA has violated sub-section (1) of Section 4 of the Act. None of the defenses that PSAA
has offered hold. Consequently, as PSAA has engaged in an activity that is prohibited under the Act,
keeping in view the mitigating factors and PSAA’s cooperative conduct and professed commitment to
support the competition regime in Pakistan, the Bench requires that PSAA: a. Pays a nominal penalty of
Rs. 1 million under Section 38 of the Act; and b. Passes the resolution mentioned in Sub-section 9 (a) of
this Order. 24. PSA should file a compliance report within 30 days of this Order.
PESCO Tender Order

Adjudicating members: Mr. Abdul Ghaffar Dr. Joseph Wilson
FACTUAL BACKGROUND:
The Competition Commission of Pakistan (the „Commission‟), as part of its bid rigging detection
program, routinely monitors information related to public sector tenders. In one such review conducted
on the tenders related to the PESCO, the department found indicators of potential bid rigging in the
Tender. The Commission, taking notice of this information, authorized an enquiry into the matter under
Section 37 (1) of the Act and appointed Mr. Tariq Bakhtawar, Director General and Mr. Syed Umair
Javed, Assistant Director as enquiry officers (the „Inquiry Officers‟).
The Inquiry Officers completed the enquiry and produced an inquiry report dated 21 July 2010 (the
„Inquiry Report‟) which concluded that the Respondents had, prima facie, collusive bid for the Tender in
violation of Section 4 of the Act, and recommended that proceedings under Section 30 of the Act maybe
initiated.
ISSUES:
a. Whether it is mandatory to define the relevant market under Section 4 of the Act for cases involving
allegation of bid rigging?
b. Whether the per se rule for condemning hard core cartels is envisioned by the Act.
c. Whether in cases of alleged bid rigging the effect on the relevant market needs to be determined?
ANALYSIS:
In its anaylsis, the Commission repelled the argument that a determination of a relevant market was
necessary to violations of Section 4. Rather it held that in cases of collusive behavior there is a
presumption that all undertakings involved are operation in the same market. The Commission also
outlined that certain categories of horizontal agreement do not have any pro-competitive effects and
were liable to be held illegal without inquiry into its effects. Such examples of contracts between
competitors included i) price fixing, ii) market division, iii) output restraints, and iv) boycott. Additionally,
the Commission also reiterated that the effects also only looked into where the purpose of the
agreement is not to restrain competition but in fact may affect competition. The Commission found that
the JV was formed to share quantities between the members at a non-competitive price by creating a
price floor.
On the issue of cover bids, the Commission found evidence to conclude that there was, at the very least,
exchange of information about pricing and the pricing strategy was a result of a coordinated move
between the two companies to ensure that the JV would win while giving the impression of competitive
bidding process.
DECISION:
In light of the discussion above, we hold that the Respondents violated Section 4 of the Act by engaging
in collusive bidding which is a serious infringement of competition law. Therefore, we are inclined to
impose a penalty of PKR 2 million on each of the Respondents. The penalty should be deposited within
thirty days of this order.
Wateen Telecom (Pvt.) Limited & Defence Housing Authority

Adjudicating members: Ms. Rahat Kaunain Hassan & Ms. Vadiyya Khalil
FACTUAL BACKGROUND:
This Order shall dispose of the proceedings pursuant to Show Cause Notices No. 63 & 64 of 2010 both
dated November 26, 2010 (hereinafter jointly referred to as “SCN”) issued to Wateen Telecom (Pvt.)
Limited (“Wateen”) and Defence Housing Authority (“DHA”), for prima facie violation of Section 4 of the
Competition Act, 2010 (the „Act‟). The principle issue in this case is whether Wateen and DHA have
entered into an agreement for the provision of telecommunication and media services in the area
controlled by DHA in Lahore, which has the object or effect of preventing, restricting or reducing
competition within the relevant market, thereby violating Section 4(1) read with Section 4(2) (b) of the
Act.
The Commission received various informal complaints from the residents of DHA, Lahore, expressing
concerns that due to an exclusivity agreement between DHA and Wateen, Wateen is the only landline
voice services provider in Phase 5 of DHA. It had further been alleged in the complaints that services
provided by Wateen are of poor quality and unreliable and consumers do not have the option of
switching to a different provider due to the agreement.
In view of the foregoing, it appeared to the Inquiry Committee that DHA and Wateen have entered into
an agreement prima facie prohibited under Section 4 of the Act having the object or effect of
preventing, restricting or reducing competition within the relevant market.
ISSUES:
i) Whether the Act applies to the Strategic Services Agreement entered into in 2006 and
whether such application amounts to giving the Act retrospective effect?
ii) Whether the Strategic Services Agreement contains provisions that prevent, restrict or
reduce competition within the relevant market in violation of Section 4?
iii) Whether Wateen qualifies for an exemption under Section 5 read with Section 9 of the Act?
ANALYSIS:
It is clear that even if an agreement, which in this case is the Strategic Services Agreement, has been
executed before the enactment of the Act but continues after the Act came into effect, would fall under
the purview of Section 4 of the Act. What needs to be appreciated here, that Section 4 of the Act applies
to prohibited agreements that are of a continuing nature and not to past and closed transactions as was
in the case relied upon by Wateen. As the Strategic Services Agreement continued after the enactment
of the Act, it was of a continuing nature and therefore, the Act was applied prospectively as intended
and not retrospectively. Therefore, the application of the Act and/or any penalty that may be imposed
for violation of Section 4 of the Act will not be retrospective, i.e. from the date the Strategic Services
Agreement was executed but from the date the Act came into effect. Hence, the question of
retrospective application of the law does not arise and is not relevant.
It is concluded that Clauses 3 and 4 read with Appendix I and III of the Strategic Services Agreement
have the effect of preventing, restricting and reducing competition through the division of the
telecommunication and media services market in the DHA Region, which are provided through HFC
network. Therefore, the provisions of the Strategic Services Agreement relating to exclusivity in respect
of provision of telecommunication and media services through HFC network is in violation of Section 4
of the Act unless the Commission is satisfied pursuant to Section 9 that an exemption should be granted
in respect of the Strategic Services Agreement under Section 5 of the Act.
On the question of exemption, the Commission considered Wateen’s submissions and found them to be
unsatisfactory.
DECISION:
The Commission finds that Clauses 3 and 4 of the Strategic Services Agreement, read with Appendices I
and III, are in violation of Section 4(1) read with Section 4(2)(b) of the Act and are declared to be of no
legal effect. The quantum of penalty for DHA is restricted to Rs. 10 million, considering their cooperation
and willingness to seek the Commission's guidance. This nominal penalty is imposed because DHA
admitted fault and expressed willingness to modify any violative provisions of the agreement. However,
DHA is reminded of its higher responsibility due to its status and mandate.
Similarly, the penalty for Wateen is restricted to Rs. 5 million, taking into account their substantial
investments in infrastructure in the DHA region before the law was enacted. However, Wateen had
ample opportunity to rectify the agreement after the law was enacted. Both parties are directed to
deposit the penalty within forty-five days of the order.
Other service providers cannot be compelled to use Wateen's network but can seek collaboration
directly. DHA is cautioned not to create entry barriers for other service providers and is directed to
provide Right of Way without discrimination.
The low penalties are due to the early stage of the law, the nature and duration of the violation, and the
specific facts of the case. However, continuing the breach will result in a maximum penalty of Rs. 1
million per day. The parties must submit any renegotiated agreement for review within 30 days of
finalization to ensure compliance with the Competition Act, 2010.
Pakistan Jute Mills Association and members mills

Adjudicating members: Ms. Rahat Kaunain Hassan & Ms. Vadiyya S. Khalil
FACTUAL BACKGROUND:
These proceedings arise out of the show cause notices no 32-42 of 2010 dated 13 October 2010, issued
under Section 30 of the Competition Act, 2010 (the „Act‟). These show cause notices were issued to
Pakistan Jute Mills Association (hereinafter „PJMA‟). The principal issue in this case is whether PJMA has
taken any decision, or the Jute Mills have entered into any agreement, with respect to production,
pricing and tendering of Pakistan Grain Sacks (PGS) to public procurement agencies, in violation of
Section 4(1) read with Section 4(2) (a), (b), (c) and (e) of Act.
The Commission, as part of its initiative to detect bid rigging in public procurement, sought information
from many public procurement agencies, including Pakistan Agriculture Storage and Supply Corporation
Limited (hereinafter „PASSCO‟) through a letter dated 18 May 2010, regarding tenders and bidding in
the last few years. Scrutiny of the information received from PASSCO revealed that the Jute Mills
provided PASSCO jute bags at the same rates over the last three years: PKR 52.96, 58.90 and PKR 86 in
the years 2007, 2008 and 2009 respectively. The information also showed that the percentage of jute
bags supplied individually by Jute Mills largely remained the same in these years when compared to the
total supply.
This information raised suspicion of bid rigging prohibited under Section 4 of the Act. The Commission,
taking suo moto notice of the information, initiated an enquiry under Section 37 (1) of the Act, and
appointed Ms. Shaista Bano, Director and Ms. Nadia Nabi, Joint Director (hereinafter collectively
referred to as „Enquiry Officers‟) to conduct an enquiry into the matter. The Enquiry Officers submitted
their enquiry report on 7 October 2010 (the „Enquiry Report‟) which concluded that there was prima
facie evidence of violation of Section 4 of the Act by PJMA and the Jute Mills. The Enquiry Report
recommended that proceedings under Section 30 of the Act be initiated against PJMA and the Jute Mills.
ISSUES:
a. Whether the Jute Mills have entered into an agreement related to the pricing, production and supply
of jute bags to PPAs in violation of Section 4 of the Act?
b. Whether PJMA has taken a decision related to the pricing, production and supply of jute bags to PPAs
in violation of Section 4 of the Act?
c. Whether, if the answer to the issues above is in the positive, substantial and reasonable grounds exist
that would mitigate the severity of the consequences attracted by the violations of the Act?
ANALYSIS:
For the purposes of its analysis, the Commission defined the product market as jute bags used for
storage of grains in Pakistan and the relevant geographical market as that of Pakistan. Moreover, the
Commission, inter alia, found emails etc that demonstrated the existing of an agreement regarding
division of product and supply between the jute mills and was held to violate Section 4(1) read with
Section 4(2)(a), (b), (c) and (e).
Similarly, in response to PJMA’s submission that discussion on tenders is not prohibited as long as price
is not discussed, the Commission reiterated its earlier rulings providing that associations do not have the
mandate to deliberate on, and take decision about, commercially sensitive information such as pricing,
product and sale of goods and services undertaken by its members.
On the issue of mitigating circumstances put forward by the undertakings, the Commission was not
convinced and, inter alia, provided that despite the peculiar circumstances governing the industry, there
was no obligation or compulsion on the undertakings to act in accordance with or under the instruction
of PPA.
The Competition Commission of Pakistan (CCP) appreciated the Pakistan Jute Mills Association (PJMA)
and Jute Mills for their full disclosure of facts and admission of non-compliance, albeit inadvertent.
While ignorance or inadvertence is not a strong defense, the candid and cooperative approach of the
parties in identifying issues hindering a level playing field was noted. The CCP aims to promote business
through competition law, and PJMA and Jute Mills have shown commitment to compliance.
Given their commitment to corrective behavior, the CCP is inclined to show leniency in imposing
penalties for the noted violations. The enactment of the Competition Act reflects a recognition of
pervasive anti-competitive practices. The CCP's mandate includes not only detecting such practices and
imposing penalties but also promoting corrective behavior for a competitive market.
The CCP issued directives to Public Procurement Authorities (PPAs) to rectify their behavior and ensure
compliance with competition law. These directives include removing entry barriers, promoting price
competition, adhering to timelines for bid acceptance or rejection, limiting tender sizes, and prohibiting
dealings with associations that could hinder competition.
DECISION:
Competition Commission of Pakistan (CCP) vide Order dated 03-02-2011 imposed a total penalty of PKR
23 million on Pakistan Jute Mills Association and 10 Jute Mills for engaging in collusive activities vis-à-vis
production and supply of Jute Bags.
Keeping in view the front role played by PJMA which is nothing but a body comprising of all the Jute
Mills as its members, it has been made liable to pay the penalty in the sum of PKR 5 million whereas all
the Jute Mills, except Amin and Suhail, having acceded to the inadvertent violation, are hereby imposed
a penalty in the sum of PKR 2 million each. Amin and Suhail, who have also acceded to inadvertent
violation but are much smaller operations are hereby imposed PKR 1 million each, with the direction to
all that the said penalty be deposited within forty five days of this order.
M/s. Pakistan Poultry Association

Adjudicating members: Ms. Rahat Kaunain Hassan Mr. Abdul Ghaffar Dr. Joseph Wilson
FACTUAL BACKGROUND:
Through this order the Competition Commission of Pakistan (the ‘Commission’) shall dispose off the
proceedings initiated under Section 30 of the Competition Ordinance, 2010 (the ‘Ordinance’) against
Pakistan Poultry Association (PPA) vide show cause notice number 25/2010 dated 15 July 2010 (the
‘SCN’). The principal issue in this case is whether PPA, through its central and zonal executive
committees, sub-committees, and wings, has taken decisions with respect to production and sale of
various poultry products which, by object or effect, prevent, restrict, and distort competition in the
poultry sector, thereby violating Section 4(1) read with Section 4(2) (a) and (c) of the Ordinance.
The Enquiry Officers submitted the enquiry report on 8 July 2010 (the ‘Enquiry Report’), concluding that
there were prima facie violations of Section 4 of the Ordinance by PPA and recommended that
proceedings under Section 30 of the Ordinance may be initiated against PPA.
ISSUES:
i. Whether the Ordinance has been applied retrospectively?

ii. Whether PPA was provided all the information it required to submit a detailed reply to the
show cause notice dated 15 July 2010 (the ‘SCN’)?
iii. Whether the issuance of the SCN violated the principles of natural justice?
iv. Whether the alleged actions of PPA are in conformity with its mandate in terms of its
Memorandum of Association?
ANALYSIS:
The Commission took suo motto notice and initiated an Enquiry under Section 37 (1) of the Ordinance
on 15 December 2009. At the relevant time the Ordinance 2009 was in force. Subsequently, the
Commission conducted ‘Search and Inspection’ of the PPA premises at Islamabad, Karachi and Lahore on
24 & 25 May 2010 at that time the Competition Ordinance, 2010 was in force. Enquiry Report in the
matter was concluded on 8 July 2010 and the show cause notices were issued to the undertakings
concerned on 15 July 2010. Therefore, the contention of PPA that the Ordinance came into force on 26
March 2010 and cannot be applied retrospectively is not tenable and ill founded owing to the fact that
the documents relied upon in the Enquiry Report relate to the period between 2 October 2007 to 28
May 2010.
The Competition Commission of Pakistan (CCP) found the Public Procurement Authorities' (PPA)
argument untenable regarding allegations of collusive conduct in pricing and production of poultry
goods. The CCP noted that the PPA's Memorandum of Association does not allow for such activities,
emphasizing that trade associations are meant to facilitate industry representation and progress, not
collusion in business matters. The CCP highlighted that the PPA's memorandum even specifies that only
permissible statistics can be collected and circulated, indicating a restriction on sharing illegal
information. Additionally, the CCP emphasized that even a memorandum of association cannot provide
immunity from statutory laws, and actions permitted by the memorandum are subject to all applicable
laws, including the Competition Ordinance.
DECISION:
The Commission in its Order dated 16-08-10 CCP said in its order that collective decisions taken on
economic aspects, as practiced by the PPA, were against the concept of competition, negated the idea
of a free market and substantiated the existence of a cartel. Hence, a penalty amounting to Rs. 50
million was imposed on PPA.
It was not denied at the part of PPA that production was being controlled to manipulate prices. The
association’s representative said the industry could have done nothing else to prevent losses. They
clarified that the grandparent and parent stocks were not meant for sale as meat before they became
infertile. It was observed in the Order that PPA had been unable to rebut the evidence presented in the
inquiry report regarding collusive decisions with regard to pricing, production and sale of broiler chicken.
It was further observed that PPA’s feed mill wing had met to take decisions regarding the price of
poultry feeds. The PPA had said that prices of perishable products like feeds could not be manipulated
because their stocks could not be stored.
Dredging Companies
Adjudicating members:
FACTUAL BACKGROUND:
This Order shall dispose of the proceedings pursuant to a Show Cause Notice Nos. 70 to 73/2009 dated
November 26, 2009 issued to M/s China Harbour Engineering Company Limited (hereinafter referred to
as ‘CHEC’), M/s Dredging International (hereinafter referred to as ‘DI’), M/s Jan De Nul N.V (hereinafter
referred to as ‘JDN’) and M/s China International Water & Electric Corporation (hereinafter referred to
as ‘CWE’) for prima facie violation of Section 4 (2) (e) of the Competition Ordinance, 2010 (hereinafter
referred to as the ‘Ordinance’) read with Section 4 (1) of the Ordinance, which prohibits collusive
tendering/bidding.
The Commission took notice of the news item appearing in the daily Business Recorder dated 04-05-
2009, wherein it was reported that some international dredging companies have formed a cartel in
order to qualify for the bids of dredging 45 kilometers long navigational channel of Port Qasim to the
extent that it gets an all-weather 14-metre draught by 2010, which was the PQA Project. The
Commission deemed it appropriate to conduct enquiry into the matter and pursuant to the powers
contained in clause (c) of sub-regulations (1) of Regulation 4 of the Competition Commission of Pakistan
(Conduct of Business) Regulations, 2007 of the Chairman; Enquiry Officers were appointed and were
authorized/appointed to conduct enquiry into the allegation of collusive bidding, which is an offence
under the provisions of sub-section (1) of Section 4 of the Ordinance read with clause (e) of the sub-
section (2) of Section 4 of the Ordinance.
ISSUES:
(i) Whether CHEC & CWE have divided territories, i.e. KPT and PQA among themselves, and
have colluded with each other and filed cover bids to realize such division, in violation of
Section 4 (2) (b) & (e) read with Section 4 (1) of the Ordinance?
(ii) (ii) Whether CHEC, DI and JDN through the ‘Consortium Agreement’ have entered into a
prohibited agreement which has its object or effect of preventing, , restricting, reducing or
distorting competition within the relevant market, in violation of Section 4 (1) read with
Section 4 (2)(e) of the Ordinance?
ANALYSIS:
The Competition Commission found the omissions by CWE & CHEC inexcusable and lacking in diligence.
CWE did not contest its disqualification despite claiming a much lower quoted price, and both parties
failed to provide basic bid documents to PQA. The Commission viewed these omissions as serious and
indicative of a lack of diligence. Considering the overall context of the case, the Commission did not
grant any benefit of doubt to CWE & CHEC, as they failed to demonstrate any valid or prudent
commercial basis for their conduct. In view of the above, we are constrained to reach the conclusion
that, there was a collusive arrangement inter se CHEC and CWE to divide territories i.e. KPT Project and
PQA Project among themselves and to file cover bids in their respective territories, which has the object
of restricting, reducing and distorting competition and is in violation of Section 4 (2) (b) & (e) read with
Section 4 (1) of the Ordinance.
On the issue of whether the consortium agreement constituted a prohibited agreement, the
Commission analyzed international jurisprudence and noted that a bidding consortium is a cartel
agreement if bidding separately would have been viable and rational business decision and if the
agreement appreciably restricts competition. The Commission concluded against the undertakings.
DECISION:
The Commission vide its Order dated 23-07-2010 observed that, all the undertakings i.e. CHEC, CWE, DJ
and JDN have violated the provisions of Section 4(1) read with Section 4(2)(e) of the Ordinance.
Accordingly, such prohibited agreements in the absence of exemption were declared void in terms of
Section 4(3) of the Ordinance.
As for the quantum of penalty, it was observed that, all the parties in view of their sophisticated nature,
international exposure and standing, it cannot even be assumed that undertakings of such stature are
unaware or unfamiliar with the competition issues. Therefore, CCP imposed a penalty of Rs. 50 million
each on the undertakings.
Fecto Belarus Tractors (Pvt.) Limited (AG)

Complainant: M/s Fecto Belarus Tractors (Pvt.) Limited
Adjudicating members: Mr. Abdul Ghaffar
FACTUAL BACKGROUND:
This order will dispose of the complaint filed by M/s Fecto Belarus Tractors (Pvt.) Limited (hereinafter
the “Complainant”) against M/s Shahzad Trade Links (hereinafter the “Respondent”) pursuant to an
order dated 16 March 2010 passed by the Appellate Bench of the Competition Commission of Pakistan
(hereinafter the “Commission”) wherein the matter was remanded to this Bench for deciding afresh
after providing an opportunity of hearing to the concerned parties.
A complaint was filed by the Complainant on 11 August 2009 before the Commission against the
Respondent assailing the legality of an exclusive agency agreement executed between the Respondent
and M/s Minsk Tractor Works, under section 4 of the Competition Ordinance, 2009. It was also alleged
in the complaint that by virtue of its exclusive agency agreement the Respondent has captured the
entire market of Belarus Tractors in Pakistan and is capable of imposing its own terms on the
Government of Pakistan for the purchase of tractors by the farmers under the Benazir Tractor Scheme.
DECISION:
The Single Member of the Commission vide its Order dated 28-05-10, disposed off the Order while
observing that, ‘pursuant to the remand order passed by the Learned Appellate Bench, both
Complainant and the Respondent were invited vide hearing notices dated 5 May 2010 to present their
case before this Bench on 18 May 2010. However, the counsel for the Complainant requested vide letter
dated 8 May 2010 to dispose of the complaint as not pressed in view of the fact that the impugned
exclusive agency agreement was valid only till the end of 2009 and the same is no more effective.’
Hence, the complaint was dismissed.
Takaful Pakistan Ltd & Travel Agents Association of Pakistan (TAAP)

Adjudicating members:
FACTUAL BACKGROUND:
The Competition Commission of Pakistan (hereinafter the “Commission”) took cognizance of the
Agreement dated 10 September 2008 (hereinafter the “TAAP Agreement-I”) entered into by Travel
Agent Association of Pakistan (hereinafter “TAAP) with Takaful Pakistan Limited (hereinafter “TPL”), on
the information provided by the Civil Aviation Authority of Pakistan (hereinafter “CAA”) vide its letters
dated 25 and 29 September 2008. The TAAP Agreement-I introduced an insurance product which
comprises (i) default insurance plan for travel agents and (ii) passengers‟ travel insurance at a premium
of PKR 300 for domestic ticket and PKR 600 for international ticket. Later on, the TAAP Agreement-I was
replaced by another agreement dated 11 March 2009 (hereinafter the “TAAP Agreement-II”) which is
still in force. The TAAP Agreement-II also provides for both default insurance and travel insurance at the
premium of PKR 300 for domestic ticket and PKR 600 for international ticket.
The Competition Commission is investigating TPL for potential abuse of its dominant position by tying
default insurance and passengers' travel insurance, which may violate Section 3 of the Competition
Ordinance, 2009. Additionally, the Commission is examining whether the agreements fix the premium
for travel insurance, restricting competition (Section 4(2)(a)), if the agreements impose supplementary
obligations on TAAP (Section 4(2)(g)), and if TPL and TAAP engage in deceptive marketing practices by
providing false information about the price or nature of travel insurance (Section 10).
ISSUES:
(i) Whether TPL by tying two distinct products of default insurance and passengers‟ travel
insurance is abusing its dominant position in contravention of Section 3 of the Competition
Ordinance, 2009 (hereinafter the “Ordinance”).
(ii) Whether the Agreements operate to fix the premium for travel insurance to be charged
from the customers/passengers and restrict competition in violation of Section 4(2)(a) of the
Ordinance, 2009;
(iii) Whether the Agreements by imposing supplementary obligation on TAAP violates Section
4(2)(g) of the Ordinance; and
(iv) Whether TPL and TAAP, through its member travel agents, are engaged in deceptive
marketing practices by failing to give and/or giving false information to passengers as to the
price and/or character of the travel insurance in contravention of Section 10 of the
Ordinance.
ANALYSIS:
The compulsory issuance of takaful cover by TPL for each international ticket sold by TAAP member
travel agents and the takaful cover passed on passengers for free, in my opinion, has prevented,
restricted and reduced competition in the travel insurance market, and the TAAP Agreements I and II,
therefore violated Section 4(2)(a) of the Ordinance.
In its analysis, the Commission held that Section 3 prohibit tie-ins i.e. the refusal to sell one product,
which a buyer desires, unless the buyer also agrees to purchase a second product that the buyer would
not otherwise want from tis seller on the offered terms. The relevant product market is the guarantee or
default insurance offered by institutions to airlines on behalf of travel agents. The Commission
reiterated the test applicable to tying provided in the Bahria University case and also stated that where
the first 3 elements of the test are proven, the remaining 2 need not be.
The Commission found that the two products were distinct as the beneficiaries of each were different.
As regards dominant position, the Commission found that TPL has a dominant position in the tying
product i.e. the individual guarantee. On the question of force, the Commission found that TPL was able
to force TAAP to accept the arrangement which TAAP would not have accepted under competitive
market conditions. The Commission also found that tying substantially closed competition in the tied
product i.e. travel insurance. Lastly, the Commission found against TPL on the issue of economic interest
of TPL. As such all 5 elements of the Bahria test were found against TPL and the tying of travel and
medical insurance with default insurance by TPL amounted to abuse of dominant position.
On the issue of prohibited agreement, the Commission, inter alia, found that the between between
TAAP and. TPL had the object of fixing price of travel and medical insurance.
On the issue of deceptive marketing, the Commission found that TAAP member travel agents not
informing passengers of travel and medical insurance (cost of which was likely passed on to them) and
that violated section 10(2)(b). Similarly, TPL was also held to have practiced deception related to the
character of the product being purchased by the consumers.
DECISION:
The Commission after conducting detailed hearings disposed of the matter vide its Order dated 29-01-
2010. It was held that the TPL has abused its dominant position by tying the products in violation of
Section 3, entered into Agreements I&II with TAAP in violation of Section 4 and have also resorted to the
deceptive marketing practices, therefore following penalties were imposed:
For abusing its dominant position, TPL shall pay a penalty of PKR Twenty Million. It shall continue to
provide TAAP members default insurance/Guarantee at the same rate of contribution i.e., PKR 70 for
each international ticket and PKR 35 for each domestic ticket sold by the travel agent, in accordance
with paragraph 2 of Schedule A of the TAAP Agreement-II.
For fixing price of travel and medical insurance for passengers, TPL and TAAP shall each pay a penalty of
PKR Ten Million.For deceiving customers/passengers, TAAP shall collect from its members and pay a
penalty of PKR Ten Million. TPL and TAAP both are directed to submit compliance reports within a
month. Upon failure to submit their respective compliance reports, TAAP and TPL shall be liable to pay
an additional penalty of PKR 200,000 per day of non-compliance.
LPG Association of Pakistan Jamshoro Joint Venture Ltd

Adjudicating members: Mr. Khalid A. Mirza, Ms. Rahat Kaunain Hassan & Dr. Joseph Wilson
FACTUAL BACKGROUND:
The Commission took Suo motto action and conducted an in depth enquiry under Section 37 of the
Ordinance and it was concluded in the enquiry report that Jamshoro Joint Venture Ltd. and LPG
Association of Pakistan entered into a vertical collusion with the aim to fix prices and also to keep the
LPG importers out from competition in the relevant market through their exclusionary conduct.
Therefore, a Show Cause Notice was issued to the both the undertakings.
The Commission was faced with various constitutional, procedural & jurisdictional questions which it
dispelled. In its analysis, the Commission held that the relevant product market was LPG and excluded
natural gas and other similar products as they are not, inter alia, ready substitutes. As regards the
geographic market, the Commission held it to be the whole of Pakistan.
ANALYSIS:
The Competition Commission held that JJVL occupied a dominant position in the relevant market due to
its ability to act independently of competitors, customers, and suppliers. Despite being separate legal
entities, JJVL, Lub Gas, and Mehran Gas were considered a single economic entity based on economic
unity and competition test criteria.
LPGAP was also found to have a dominant position in the market, holding 40% market share. The
Commission distinguished 'control' in company law and competition law, defining it as the ability to
influence or manage decision-making in competition law.
The concept of limit pricing was discussed, where it is legal if benefits are passed on to consumers and
the economy avoids duplicate production. However, if it results in undue exclusion without benefit to
the economy, it is illegal. JJVL was found to engage in limit pricing, creating barriers for importers and
restricting competition.
The Commission emphasized that the goal of competition law is to protect competition structures, not
necessarily to ensure very low prices. It concluded that JJVL abused its dominant position by keeping
producer prices low and excluding importers, limiting competition.
Regarding prohibited agreements, the Commission found evidence of cartelization, including a vertical
cartel between JJVL and LPGAP, and a horizontal cartel among LPGAP marketing companies. LPGAP
unlawfully set prices and enforced them in the market, which was deemed illegal.
Despite the complainant being a member of LPGAP, the Commission held that inclusion in collusive
activity does not validate or make the actions lawful. The Commission also relied on media reports, as
they were not retracted or dispelled, and referred to an ECJ decision on elements of collusive practice,
though it did not find sufficient evidence of this between JJVL and LPGAP.
DECISION:
The matter was disposed off vide Order dated 14-12-2010 the Commission.A penalty amounting to
3.75% of last annual net turn-over i.e. PKR 278,087,448 (based on annual accounting statements for the
year ending 30 June 2008 which records net turnover as PKR 7,415,665,289) was imposed on JJVL. JJVL is
directed to cease and desist from restricting competition through limit-pricing, OGRA is strongly
recommended to review its policy and implementation regarding ‘reasonable consumer price’ and is
directed to take necessary measures to ensure a level playing field for all stakeholders and to ensure
that no party including importers should either be excluded from the relevant market through anti-
competitive measures or be allowed to create or maintain artificial entry barriers in the relevant market.
Commission taking a lenient view imposes a sum of Rs 40 million as penalty on LPGAP keeping in view
that LPGAP is not a repeat offender.
Fecto Belarus Tractors Ltd (Shahzad Trade Links)

Complainant: M/s Fecto Belarus Tractors (Pvt.) Limited
Adjudicating members: Dr. Joseph Wilson
FACTUAL BACKGROUND:
M/s Fecto Belarus Tractors (Pvt.) Ltd. (FBT) filed a complaint against Shehzad Trade Links for entering
into an agreement with M/s Minsk Tractor Works in violation of Section 4 of the Ordinance. The
Commission after conducting Enquiry disposed off the matter vide its Order dated 2-10-2009. FBT being
aggrieved of the Order preferred an appeal against the Order before the Appellate Bench of the
Commission on the ground that they were neither joined in the Enquiry, confronted by the Enquiry
Officer nor was it confronted with the Enquiry Report before passing of the Impugned Order.
ANALYSIS:
The Appellate Bench of the Commission accepted the appeal filed by M/s Fecto Belarus Tractors (Pvt.)
Limited vide its Order dated 16-03-2010 and remanded the matter back to the Member (Cartels,
Monopolies & Trade Abuses) who may after giving both the parties an opportunity of hearing, pass an
Order afresh as deemed appropriate under the circumstances.
The Appellant Bench has observed that, in conducting an enquiry, opportunity of hearing is not
mandatory. It was held that, a distinction needs to be made where an enquiry results into initiation of
proceedings under Section 30 of the Ordinance, the Ordinance statutorily provides an opportunity of
hearing; hence an opportunity of hearing during the enquiry is not mandatory. However, the Impugned
Order has been passed in the matter where upon complaint filed by the Appellant, the enquiry records
adverse findings against the Complainant/Appellant and the Impugned Order relying upon such findings,
disposes of the complaint without providing an opportunity of hearing. This could perhaps be because of
the fact that the Ordinance or the rules regulations, thereunder, do not specifically provide the
procedure for disposal of complaints, where enquiry is concluded with the findings that it does not merit
initiation of proceedings under Section 30 of the Ordinance.
DECISION:
Upon consideration of the entire matter, the appellant bench held that, where a complaint has been
filed and the findings of an enquiry do not indicate any prima facie violation and/or give any adverse
findings against the complainant, it would be only fair and in accordance with the principles of natural
justice that prior to the disposal of the complaint an opportunity of hearing be given to the complainant.
All Pakistan Cement Manufacturer Association (APCMA) and member
undertakings
Adjudicating members: Mr. Khalid A. Mirza Ms. Rahat Kaunain Hassan
FACTUAL BACKGROUND:
All Pakistan Cement Manufacturers’ Association, is registered body and was incorporated in 1992 under
Section 32 of the Companies Ordinance 1984, (hereinafter referred to as the “Undertaking”) within the
meaning of Section 2(1)(p) of the Competition Ordinance, 2007 (the “Ordinance”). It is the primary
association of cement manufacturers in Pakistan who are members of the Undertaking and are referred
to as the “Member Undertakings”. According to its Memorandum of Association (hereinafter referred to
as the “Memorandum”) the Undertaking has been established for, inter alia, the following objectives:
providing a common forum for the cement manufacturers; protecting, safeguarding and promoting the
interest of its members; monitoring production levels of its members and thus, the industry as a whole;
and coordinating and securing co-operation amongst its members.
The necessary preliminary information gathered by the Commission shows that the Undertaking offers
membership to all cement manufacturers operating in Pakistan, on the payment of a fixed entrance fee
plus an additional annual subscription fee. At present, it has twenty-one (21) members (out of a total of
twenty-nine (29) cement manufacturers in Pakistan) members (mentioned above).
The Commission took Suo moto notice of the items appearing in newspapers and electronic media’s
websites on 20.3.2008 referring to a purported agreement between the various cement manufacturers
at a meeting of the APCMA. Acting in line with its mandate the Commission, in order to collect evidence
against alleged conclusion, authorized a team of its officers to conduct a search of the premises of
APCMA on 24.4.2008. During the search of the premises the officers successfully recovered, inter alia, an
agreement dated 8.5.2003 between APCMA and its members (‘the Agreement’). The Agreement
contained clauses aimed at controlling quotas and supply to achieve a targeted price amongst parties to
the Agreement. This was clearly a prima facie violation of section 4 (1) and section 4 (2) (a) and (c) of the
Ordinance. Show Cause Notices to the concerned undertakings were duly issue.
ISSUES:
(a) The power of the Federal Government to issue policy directives to the Commission and the fact
that the Commission is bound to comply with the same undermines the position of the
Commission and negates the basic requirement of independence and impartiality;
(b) Section 30 of the Ordinance requires the Commission to issue the said SCN, which in fact has
been issued by a member of the Commission; therefore, the SCN is void itself and should be
withdrawn;
(c) The functions and powers of Commission are stipulated under Section 28 of the Ordinance and
this section does not grant Commission with the right to take suo moto action;
(d) The Commission has erred in treating the entire Pakistani market of cement as being one
market; therefore, it is not the “relevant” market for the purposes of Sections 2 (1) (k) and 4(1)
of the 2007 Ordinance;
(e) According to the law, the Commission should have made an enquiry pursuant to Section 37 (1)
and (2), prior to conducting search and issuing the SCN under Section 30 and this lapse of
procedure renders the entire proceedings arbitrary and illegal. Further, the Commission was
extremely lax in issuing the SCN as it did so seven (7) months after taking suo moto notice.
(f) Notice under Section 30 is specifically covered under Section 37 (4) and from a plain reading it
emerges that a Section 37 (4) inquiry must be concluded prior to conducting of raid. However, at
the time the raid was carried out, the Commission had no way of knowing whether or not the
Member Undertakings were guilty of any anti-competitive behavior and whether it was
necessary in the public interest to commence proceedings.
(g) The exercise of powers under Section 34 of the Ordinance has to be for the purposes of
enforcing any provision of the Ordinance. The Order authorizing Officer of the Commission to
enter and search is contrary to Section 34 of the Ordinance. There must be some prima facie
evidence and the Commission must identify the provision, which may have been violated, as the
Ordinance does not authorize a ‘fishing expedition’. Since investigation has not been carried out
accordingly, it should be rendered illegal automatically, making the raid void ab intio and hence,
the Commission cannot rely on material allegedly recovered from the raidTPF 1 FPT on the
principle of ‘fruits of a poisonous tree’.
(h) According to the principle of ‘fruits of a poisonous tree’, documents recovered by the
Commission are not admissible in evidence.
(i) According to Section 34 (6) of the Section it is mandatory for the raiding officers to prepare and
sign an inventory of any documents seized and this requirement not complied with.
(j) The rules and regulations to the Ordinance make no provision for establishing the manner in
which Appellate Benches are to be constituted;
(k) Since the same case has already been adjudicated and decided by the Lahore High Court in DG
Khan Cement v Monopoly Control Authority reported at 2006 CLD 1237, it cannot be re-
adjudicated by the Commission;
(l) The Agreement cannot be used as a basis for the issuance of the SCN as it does not fall within
the regulatory ambit of the Ordinance and/or Commission for the following reasons: (i) It is not
a ‘prohibited agreement’ in terms of Section 4 of the Ordinance; and (ii) Notwithstanding the
above, there is no available evidence to show that the Agreement was ever implemented and/or
that it was ever effective after the promulgation of the Ordinance;
(m) The scope of Section 4 of the Ordinance does not cover situations where an agreement, which
was executed prior to the promulgation of the Ordinance, remains in force after its
promulgation. Instead it only covers situations where undertakings or their associations ‘enter
into an agreement’; and
(n) Section 4 (1) and 4(2) (a) and (c) of the Ordinance are prospective in nature and cannot have
retrospective effect. Accordingly, since the Agreement was not only executed but it also expired
(i.e. June 2005) before the promulgation of the Ordinance (i.e. 2 October 2007), the Commission
cannot take action on the basis of the Ordinance
ANALYSIS:
I) The undertakings argued that the Commission and not a duly authorized person/body should issue the
show-cause notice. The Commission responded power to issue SCNs could be delegated under Section
28(2).
II) On the objection that the Commission could not take suo moto action, the Commission responded by
rejecting the argument on the ground that there is no such restriction under the Competition statute.
III) On the question of relevant market, the Commission held all of Pakistan to the be the relevant
geographical market and cement to be the product market. The Commission’s reasoning was, inter alia,
that member undertakings constituted most of the cement manufacturers across Pakistan and were
operating in the same market; there were overlaps in the operating markets of each cement
manufacturer with at least another; transport costs do not divide the geographical market as other
benefits such as cheap labor and raw material offset this purported disadvantage; all products are
available to the same users as opposed to the same locality which will determine the relevant market.
IV) The Commission dispelled the presumption that an enquiry under Section 37 was a necessary
prerequisite to initiating proceedings under Section 30.
V) The Commission held that it has the power to enter and search under Section 34 and there is no
requirement of showing prima facie evidence to do so. As a consequence, it held that the Fruit of a
Poisonous Tree’ doctrine would not apply to the evidence recovered.
VI) That an agreement, which by its very nature restricts competition (i.e. having naked restraints) is
treated as having the object and purpose – it is the objective meaning and not the subjective intention
of the parties that will govern. Such an agreement will by its very nature be a prohibited agreement.
DECISION:
After conducting thorough hearing the Commission vide its Order 27-08-09, imposed a penalty of 7.5%
of turnover in the case of each member undertaking based on last annual accounting statements.
APCMA itself was fined a maximum of Rs. 50 million. It is also pertinent to note that in developed
jurisdiction another important principle has been laid down that is, an undertaking facilitating or
contributing to the cartel in any manner can be penalized for cartelization, notwithstanding whether an
undertaking is directly part of the cartel formation or not. Therefore, if any firm/undertaking has been
involved in facilitating the subject cartel, we hereby direct the relevant department of the Commission
to initiate proceeding in accordance with law under the Ordinance against such undertaking. In this
regard, reference is made to the Organic Peroxides EU case decided in 2008 which imposed a penalty of
1000 Euros on a consultancy firm.
All Pakistan Akhbar Farosh Federation, All Pakistan News Papers Society (APNS)
and 13 other members/conveners
Adjudicating members: Maleeha Bangash
FACTUAL BACKGROUND:
At issue in this case is firstly, whether the Minimum Cover Price Formula issued by the All Pakistan
Newspapers Society (“APNS”) to all its members constitutes price fixing thereby violating Section 4(1) of
the Competition Ordinance, 2007 (“Ordinance”). Secondly, whether the decision of Subcommittee on
Cover Prices of APNS (“Subcommittee”) to set minimum prices and subsequent formula constitutes
Newspaper price fixing thereby violating Section 4(1) of the Ordinance. Lastly, at issue is whether the
agreement of the All Pakistan Akhbar Farosh Federation (“Akhbar Farosh”) with APNS to ensure that no
Newspaper violating the Minimum Price Formula constitutes a restrictive trading condition with regard
to the sale of the Newspapers, thereby violating Section 4(1) of the Ordinance.
The Commission took suo moto action against APNS and its Subcommittee for setting the minimum
price for all the Newspapers Vide letters dated April 29th, 2008 and May 2nd, 2008 and also against
Akhbar Farosh for entering into an agreement on April 29th, 2008 with APNS whereby the Akhbar
Farosh would not distribute any Newspaper whose cover price is below the minimum price level.
An enquiry under Section 37 of the Ordinance was initiated and a notice was issued to the APNS on May
26th, 2008 and a separate notice was issued to the Akhbar Farosh on August 6th, 2008, inviting therein
the views of the respective parties on the matter.
ISSUES:
i. Whether APNS has entered into a horizontal agreement by issuing a Minimum Price Formula
to all it’s member Newspapers thereby behaving as a cartel and whether that agreement
has resulted in the prevention, restriction and reduction of competition in the relevant
market;
ii. Whether the decision of the Subcommittee to direct all it’s members to raise the minimum
prices that their Newspapers could be sold has resulted in the prevention, restriction and
reduction of competition in the relevant market.
iii. And whether the Akhbar Farosh entered into a vertical agreement that prevents, restricts,
and reduces competition in the relevant market by imposing a restrictive trading condition
in the distribution of Newspapers.
ANALYSIS:
The decision of Subcommittee was endorsed by APNS in its letters dated April 28th, 2009 and May 2nd,
2009. These letters were also used as press releases and explicitly conveyed the decision of APNS as an
association, giving effect to the Minimum Cover Price Formula, which was agreed upon in the meeting of
its Subcommittee. Therefore, the decision of APNS to fix the minimum price of Newspapers is a
“decision of association of undertakings” within the purview of section 4(1) of the Ordinance.
For the purposes of this matter, the Commission determined that all newspapers constitute the relevant
product market and the geographic market was defined as Pakistan. The Commission held that the
horizontal agreements – those entered into by competitors at the same level of production or
distribution chain to cooperate with each other – which in this case were the agreement to fix minimum
cover price of newspapers by APNS sub-committee and the issuance of the minimum cover price
formula by APNS to its members, are, inter alia, avoiding competition with each other in the market
place.
In summary, the resale price maintenance agreement between APNS and Akhbar Farosh is viewed as a
mechanism to monitor collusion among members. It enables the detection of deviations from the
Minimum Price Formula by newspaper publishers, reducing competition within and between brands.
This practice also hinders smaller publishers unable to sell at higher prices and raises barriers to entry
for new players. Additionally, it limits distributors' pricing freedom, ultimately restricting consumer
choice and welfare. Consequently, the vertical agreement between APNS and Akhbar Farosh is deemed
void under section 4(3) of the Ordinance.
DECISION:
Since all the Undertakings have filed Commitments pursuant to Part IV of the Competition Commission
(General Enforcement) Regulations, 2007, therefore, I have decided to take a lenient view in the instant
matter by not imposing any penalty on the undertakings under the Section 38 of the Ordinance.
The press release should appear in all leading Newspapers within 7 days of the receipt of this order,
failing which a penalty of Rs. 200,000 per day shall be recovered from APNS under Section 40 of the
Ordinance, for the non-compliance of the Order of the Commission. The Akhbar Farosh is hereby
warned to continue to distribute Newspapers at the price determined by the respective Newspaper
publishers themselves and not to cooperate in any manner on the decision of Newspaper publishers to
fix the Newspapers prices. All concerned parties i.e. APNS, Akhbar Farosh and the Subcommittee are
warned that in case they are found guilty of violating the Ordinance in the future, major penalties under
the law shall be imposed on them without any leniency.
Karachi Stock Exchange (Guarantee) Ltd,Lahore Stock Exchange (Guarantee) Ltd,

Islamabad Stock Exchange (Guarantee) Ltd. (JW)
Adjudicating members: Dr. Joseph Wilson
FACTUAL BACKGROUND:
The Competition Commission of Pakistan (hereinafter the “Commission”) took suo moto notice of
Circulars/Notices issued by Karachi Stock Exchange (hereinafter “KSE”), Lahore Stock Exchange
(hereinafter “LSE”) and Islamabad Stock Exchange (hereinafter “ISE”) for placing/fixing a price floor for
securities. KSE notice KSE/N-501, dated 27th August 2008, addressed to all of its members conveyed the
decision of KSE board to place a floor on the trading price of the securities based on the closing price of
securities as on 27th August 2008 and was to take effect from 28th August 2008. Subsequently LSE and
ISE both followed the price floor decision taken by KSE vide their Circulars/Notices No. 2042 &
ISE/CIR/08/101, respectively issued on 28th August 2008. At issue in this case is whether placing of floor
(or fixing of minimum price) on the trading price of listed securities by KSE, LSE, and ISE during trading
sessions amounts to “fixing the purchase and selling price . . . of any goods or the provision of any
service” thereby violating Section 4 of the Competition Ordinance, 2007 (hereinafter the “Ordinance”).
The Inquiry Officer completed her Inquiry Report on 3rd December 2008, which concluded that the
rationale given by all of three Undertakings i.e., KSE, LSE and ISE is unsatisfactory to justify the
setting/fixing of a minimum price at which securities can be traded, hence, the impugned arrangement
prima facie violates Section 4(1), in particular section 4(2)(a) of the Ordinance.
ISSUES:
The issue was whether such floor pricing violated Section 4 of the Competition Ordinance, 2007.
DEFENSES:
Finally, KSE argued that Article IV (4)(d) of the Memorandum of Association of KSE authorizes it to make
or adopt regulations relating to “fixing and declaring market rates and settlement rates and dates.” (see
paragraph 25 (j), above). Suffice it to say that Article IV(4)(d) of the Memorandum of Association of KSE,
being clearly repugnant to section 4 of the Competition Ordinance cannot save the decision of the KSE.
LSE argued that it implemented a price floor to prevent panic selling on its platform, which could have
led to large-scale default by its members and eroded the security value of KSE members. While the
intention may have been to protect members' security value, the price floor had the effect of limiting
competition in the market. LSE also likened its action to a suspension of service for securities trading
below a certain level, but this was seen as similar to professional associations refusing services below a
certain fee level. Overall, LSE's price floor, while well-intentioned, was viewed as anticompetitive.
ANALYSIS:
In its analysis, the Commission, inter alia, held that the determinants of a competitive market are i)
absence of a dominant player, ii) availability of choices, iii) perfect information as to market conditions,
iv) easy entry, and v) easy exit. Moreover, it further stated that the primary objective of establishing a
stock exchange is to bring a large number of buyers and sellers together to buy and sell securities, have
choices, have perfect information as to price of securities and can enter and exit the market at a price of
their choice.
The Commission held that where the actual intention is to set a particular price or otherwise affect the
market price, the decisions are liable to be condemned per se. Further, the Commission also analyzed
this decision on the touchstone of the Chicago test which provides the basis for ascertaining the legality
of restraints by looking at i) the nature of the rule, ii) the scope of the rule, and iii) the effects of the rule.
In doing so, the Commission held that firstly, the decision in this case set the price rather than restricting
the period of price-making. Secondly, the decision was broad in operation applied to all listed securities
throughout Pakistan. Thirdly, the decision had the effect of declining trade volume by more than 98%.
As such, it restricted competition in several ways as it, inter alia, restricted competitive bidding in
negation of the very essence of stock markets.
DECISION:
Ordinarily, in view of the seriousness of the violation, high penalties would be appropriate. However,
competition regime is rather new in Pakistan, and it is understandable that the market players need
some time to align their activities/business practices to conform with the dictates of the Competition
Ordinance. Keeping this aspect in mind, I am inclined to err on the lower side rather than the higher side
while imposing penalties for this violation of Section 4(1). Also, I need to bear in mind that while ISE had
been rather contrite, both KSE and LSE were not. Further, the actions of KSE and LSE had broad
consequences on the economy; whereas consequences of ISE’s actions were somewhat de minimis. The
parties are, therefore, penalized as follows:
i. KSE for a sum of rupees six million (Rs. 6,000,000).

ii. LSE for a sum of rupees one million (Rs. 1,000,000);
iii. ISE for a sum of rupees two hundred thousand (Rs. 200,000).
iv. The Undertakings shall pay the penalty imposed within thirty days of the date of this Order,
failing which recovery proceedings shall be initiated under Section 40 of the Ordinance.
Institute of Chartered Accountants of Pakistan (ICAP)
Adjudicating members: DR.JOSEPH WILSON
FACTUAL BACKGROUND:
At issue in this case is whether the fixing of minimum hourly charge out rates and minimum fee for audit
engagements by the Council of the Institute of Chartered Accountants of Pakistan (hereinafter “ICAP” or
the “Institute”) violates Section 4(1) of the Competition Ordinance, 2007 (hereinafter the “Ordinance”).
The Competition Commission of Pakistan (hereinafter the “Commission”) took suo moto notice of ICAP’s
Circular No. 09/2008 dated 13 August 2008 addressed to the members of ICAP. The Circular conveyed
the decision of the Council of ICAP to approve the recommendations of the Technical Advisory
Committee relating to the revisions of (Technical Auditing Release) ATR-14, which is in force since 1987
and prescribes the minimum hourly charge out rates and minimum fee for audit engagements based on
the turnover of the company being audited (hereinafter “Minimum Fees”). The revised ATR-14 applies
to all audit appointments made after August 31, 2008. The Circular also mentioned that failure to
comply with the directives of the Council will “fall within the mischief of Part 4 of Schedule I of the
Chartered Accountants Ordinance, 1961,” which lay down the instances of “professional misconduct in
relation to the members of the Institute generally.”
ISSUES:
The primary issue before the Commission was whether this action by the Council of the ICAP violated
Section 4(1) of the Competition Ordinance 2007.
ANALYSIS:
Section 4 of the Competition Ordinance is compared to Article 81 of the Treaty of Rome and Section 1 of
the Sherman Antitrust Act, which all pertain to anticompetitive agreements. In the US, such agreements
are analyzed in two categories: those clearly anticompetitive (illegal per se) and those needing detailed
evaluation of industry specifics. Similarly, the EU considers agreements anticompetitive if they have this
effect, without needing to analyze concrete effects. Minimum price-fixing agreements are typically
condemned outright. Courts in the US and the EU have addressed whether fixing minimum fees by a
professional body violates competition laws. The US Supreme Court case Goldfarb v. Virginia State Bar
determined that minimum fee schedules constituted price fixing, as they acted as fixed price floors.
ICAP argued that the State Bank of Pakistan (SBP) and the Securities and Exchange Commission of
Pakistan (SECP) have created a certified panel of auditors to maintain standards of professional
excellence, similar to ICAP's Quality Control Review (QCR) rating. They believe this certification is part of
SBP and SECP's supervisory role, empowered by relevant legislation.
ICAP also noted that ATR-14 has been in place since 1987, and there have been no complaints filed by
the public or government officials. However, it's important to note that while ATR-14 existed since 1987,
minimum fees were only recommended until April 2003 when they became mandatory. This is similar to
the Belgian Architects' Association Case, where a minimum fee scale was in place for 36 years before
catching the attention of the European Commission in 2002 and being fined €100,000. The concept of
gaining legality through "prescription" does not apply in this case.
DECISION:
The matter was disposed of vide Order dated 04-12-2008 wherein the concerned circular was found to
violate Section 4(1) and held to be void under Section 4(3). However, no penalty was imposed. Rather,
the undertaking was directed under the Order to inform its members through a circular regarding
withdrawal of ATR-14 from the Members’ Handbook, Volume-II, Part-II Section (c) and further to publish
notice of withdrawal in two newspapers, one English and one of Urdu, nationwide circulation before
December 19, 2008 failing which a penalty in sum of Rs.300,000 per day of infringement was to be
recovered from the undertaking under Section 40 of the Ordinance.
APPEAL BEFORE THE APPELLATE BENCH OF THE COMMISSION: ICAP preferred an appeal before the
Appellate Bench of the Commission. The Appellate Bench of the Commission vide its order dated March
11, 2009 upheld the Order of the Single Member of the Commission.
ICAP preferred an appeal before the Supreme Court of Pakistan against the Order of the Appellate
Bench of the Commission.

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SECTION 4 OF THE COMPETITION ACT, 2010 – SUMMARY OF ORDERS

Adjudicating members: Shaista Bano and Mr Mujtaba Ahmed Lodhi

Based on the available facts and evidence, the Bench concluded:

Adjudicating members: Ms. Shahista Bano & Ms. Bushra Naz

Adjudicating members: Dr. Muhammad Saleem & Dr. shahzad ansar

An enquiry was constituted to duly probe into the matter.

In the matter of show cause notice issued to Pharma Bureau.

Whether Pharma Bureau has violated Section.4 of the Act?

Adjudicating members: Dr. Shahzad Ansar & Dr. Muhammad Saleem.

Adjudicating members: Dr. Shahzad Ansar & Dr. Muhammad Saleem.

Adjudicating members: Dr. Muhammad Saleem & Dr. Shahzad Ansar

IN THE MATTER OF COMPLAINT AGAINST PAKISTAN ENGINEERING COUNCIL

In the Matter of show cause notices issued to Pakistan Automobile

LDI Operators Order – pursuant to the order of Honourable Supreme Court of

In the Matter of show cause notice issued to Institute of Chartered Accountants

B. impose a penalty of PKR 25 Million on ICAP; and

In the Matter of Complaint filed by Pakistan Overseas Employment Promoters

- PKR 50 million on 1-Link (Guarantee) Limited

Withdrawal of Complaint filed by ELTEK VALARE A.S Order

Pakistan Vanaspati Manufacturers Association Order

b. Whether a decision of an association with respect to price fixing notwithstanding its

Implementation agreement entered into between PQA and EVTL

a) What is the relevant market?

Pakistan Ship's Agents Association Order

PESCO Tender Order

Adjudicating members: Mr. Abdul Ghaffar Dr. Joseph Wilson

Wateen Telecom (Pvt.) Limited & Defence Housing Authority

Pakistan Jute Mills Association and members mills

M/s. Pakistan Poultry Association

i. Whether the Ordinance has been applied retrospectively?

Fecto Belarus Tractors (Pvt.) Limited (AG)

Adjudicating members: Mr. Abdul Ghaffar

Takaful Pakistan Ltd & Travel Agents Association of Pakistan (TAAP)

LPG Association of Pakistan Jamshoro Joint Venture Ltd

Fecto Belarus Tractors Ltd (Shahzad Trade Links)

Adjudicating members: Dr. Joseph Wilson

Adjudicating members: Mr. Khalid A. Mirza Ms. Rahat Kaunain Hassan

Adjudicating members: Maleeha Bangash

Karachi Stock Exchange (Guarantee) Ltd,Lahore Stock Exchange (Guarantee) Ltd,

Adjudicating members: Dr. Joseph Wilson

i. KSE for a sum of rupees six million (Rs. 6,000,000).

Adjudicating members: DR.JOSEPH WILSON

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