MEASURING Pakistan.CCP inquiry found that Telenor Charging for

MEASURING
EFFECTIVENESS AND INEFFECTIVENESS OF CCP:

The competitive commission of Pakistan had taken actions
against various sectors that are involved in anti-competitive practices, on the
other hand there are many cases in which CCP shows ineffectiveness and cannot
take action against them.

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Ø Examples of effectiveness:

CCP has taken many actions against cartel, monopoly, illegal
marketing and has also issued show cause notices to different companies like
fabric companies, Colgate-Palmolive for deceptive marketing prices, Proctor and
Gamble Pakistan (Pvt.) Limited, Utility stores corporation of Pakistan, Dairy
companies, Bahria Town (Pvt.) Limited, Pakistan State oil company limited etc.

1.    
Show cause notice issued to Bahria Town
(Pvt.) Limited:

Under the competition act 2010 show cause notice No. 24/2016
was issued to M/S Bahria Town on not granting M/S Nayatel the right of way to
lay down its cable, internet and telephone service in phases 1-6.On 12-01-2016,
CCP received an email from a local resident of bahria town that the residents
of phases 1-6 do not find any alternative CIT service provider and are forced
to use the CIT services provided by PTCL. No other substitute is available
because the management of bahria town has refused to give NOC to nayatel to
operate in phases 1-6. After the entire dialing, the inquiry committee
concluded that bahria town management is violating the rules by imposing
dissimilar conditions on nayatel. Fine has been imposed on bahria town and
permission has been granted to nayatel.

1.     Show
cause notice issued to Telenor Pakistan:

CCP has issued notice to Telenor Pakistan for violating
section 10 of the competition act 2010 by misleading marketing of their prices
and geographical availability of 4G services. CCP has received a complaint against
Telenor from Zong that it wrongly provide 4G services absolutely free all
across Pakistan.CCP inquiry found that Telenor Charging for additional usage
accept for 100MB’s data that was free for all. Nationwide availability of 4G
service was also misleading as it is only limited to selected areas of Karachi,
Lahore, Islamabad, Quetta, Peshawar, Multan and Faisalabad.  

 

The Competitive commission of Pakistan has maintained its 3
star rating in the annual ranking of world’s top competition authorities by
showing consistent performance. Global Competition Review (GCR) issues these
rankings. It provides a comprehensive evaluation of their performance.
According to GCR, in year 2016 the commission faced many challenges in terms of
the judicial review process where many cases were pending but then the
commission has formed “Competition
Appellate Tribunal” which started hearing the pending appeals of the last year.
This tribunal upheld nearly PKR 100
Million fine against the poultry association of Pakistan.

Ø  Examples of Ineffectiveness:

Many cartels of cement, sugar industry and automobile are
taking advantage by overcharging their consumers worth billions of rupees and
are taking shelter under the stay order of courts so that CCP cannot take any
actions against them. The senate standing
committee on finance has raised their concern over the performance of CCP,
which is no paying any attention to the functioning cartels that result in
inflation. According to them inflation in the country is increasing because
many sectors in the industry are acting as cartel. E.g., cement industry.

1)    Cartelization
in Cement Industry:

During the government of PPP a scandal involving the cement
sector was arrived in which the cement manufacturers were taking billions of
rupees from consumers through abnormal increase in cement prices in year 2011
and 2012. A letter was issued to CCP to take actions against them but as soon
as the industrial secretory and top political leaders came to know about this,
they had stopped CCP from taking any actions. Therefore, CCP has failed to prove
cartelization due to lack of evidences. Many cases of CCP are still pending in
different courts of Pakistan and the cartels present in the industry have taken
stay order which results in no action against them.

 

 

 

 

 

Evaluation
of Competition Law In Pakistan:

The competition law was first established in 1970s, when
Pakistan first disseminates Monopolies and restricted Trade practices
ordinance, 1970. However, taking into account the current economic trends and
some limitation of the previous law, the government of Pakistan totally rebuilds
its competition tyranny in 2007 by approving a new law, named as the
“Competitive Commission of Pakistan. 2007 laws were approved as an Act of
Parliament in Oct. 2010. This law will give CCP a judicial ability to generate
free competition in all sectors of trading and financial activities, strengthen
economic efficiency, and to save consumers from anti-competitive behavior.

Competition Act 2010, of Pakistan:

The competition 2010 is applied to the entire Pakistan and to
all action and things that are prevailing in and outside Pakistan that block,
slowdown, and control or limit competition within Pakistan.

The Act Prevents:

1-    Misuse
of supreme Position;

2-    Anti-competitive
concurrence;

3-    Ambiguous
retail execution;

4-    Mergers
and acquisitions that greatly reduce competition

 

 

 

 

 

 

 

 

CCP
Case that reach in courts:

CCP ISSUED
SHOWCAUSE NOTICE AGAINST HONDA COMPANY AND HOSCOL:

Recently on November 9 news came that Oil companies of
Pakistan are being threaten to move against the HONDA company. The Oil
companies advisory council (OCAC) is the representative of many oil marketing
companies and refineries, is threaten HONDA Pakistan to withdraw the complaint
about the sale without any proof of low quality fuel in the market. HONDA
claims that they sale low quality fuel with high mercury level and the most
offensive situation is this that one of the key members of OCAC-HASCOL is also pointing
finger on them. Because of this they are facing much difficulty to prove
themselves innocent in front of everyone. HOSCOL- petroleum also support the
HONDA’S allegation that there is high content of manganese in the petrol due to
which the new models of Honda Atlas and other new cars are facing problem of
chocking of the car catalysts converters. But this is not true because the
highly supervised employees and the OCAC itself check all the petroleum. The problem is with in this model the engine management system of this vehicle was improperly
calibrated for the Pakistan market and manganese was extremely unlikely to be
the cause of failure of this vehicle. On the other hand the EURO-2 vehicle has also
this catalytic converter and they are not facing this issue. A HONDA team from
Japan came here and changed the software and then said that problem is not with
fuel its with the system in this car. On this an OCAC official said that there
is no limit of manganese content in the petrol by government.

Issue of Pakistan International Airline:

PIA’s main business is to provide domestic and international
passenger and cargo air transport services within Pakistan and on 30
international routs. CCP has received complaints against PIA that they are
charging additional charges if any of passenger changes or reschedule its flight
time or cancel the flight.. Preliminary research was conducted by collecting
information from the official websites of both national and foreign air
carriers regarding fee charged for rescheduling. After the preliminary research
the commission took suo moto notice and constituted an inquiry committee on
july16 2009. This all in the result of violation of section (3) of the
ordinance. PIA after having understood the concern of the Commission, has
volunteered to remove the discriminatory fee structured. So it was finalized
that a passenger who wishes to reschedule his/her flight to an immediate
preceding flight be allowed to do that without any charge.

CCP TAKES NOTICE OF SHARP RISE IN AIR FARES BY PRIVATE
AIRLINES FOLLOWING DISRUPTION OF PIA FLIGHTS OPERATION:

On 3rd February 2016 in Islamabad the Competition
Commission of Pakistan (CCP) has taken the notice of increase in the airfares
by the private airlines because of the disarrangement of Pakistan International
Airlines (PIA) flights due to a strike by its employees. But CCP was given
order by the Act of Competition 2010 that they were allowed to check any
anticompetitive practices taking place around them or fixing prices according
to their own needs and means. So CCP have noticed that many airline companies
raise their airfares according to their need of business due to the PIA
employees strike. CCP have taken strict action and undertaking against these
anticompetitive practices.