Shipping agents fined Rs1m for forming cartel

CCP takes a lenient view due to shipping body’s cooperation.


Express June 23, 2011

ISLAMABAD:


The anti-trust watchdog on Thursday imposed a fine of Rs1 million on the Pakistan Ship Agents Association (PSAA) after finding evidence of about the creation of a cartel that restricted competition in the market.


A three-member bench of the Competition Commission of Pakistan (CCP), in its order, held that PSAA had violated Section 4 of the Competition Act, 2010 by recommending a range of charges for ancillary shipping services provided by its members, said a CCP statement. The bench comprised members of CCP namely Abdul Ghaffar, Dr Joseph Wilson and Mueen Batlay.

“The Commission while taking into account government pressure on PSAA to regulate prices, PSAA’s cooperation during the proceedings and its assurance to support the competitive regime, took a lenient view and imposed a penalty of Rs1 million for the violation,” states the order of CCP.

PSAA, the sole licensed trade association for shipping agents with 70 members who handle vessels that call at ports, has been asked to submit a compliance report within a month besides passing a resolution affirming its adherence to competition laws.

Earlier, the Commission received information from Pakistan Paper Merchant’s Association through its letters that PSAA may be involved in collusive practices regarding determination of ancillary charges pertaining to shipping services.

In its arguments before the bench on March 25, PSAA contended that it was constantly pressurised by the government to regulate prices and expressed its desire to conform to competition laws and asked CCP for guidance on future conduct.

However, it admitted that although the price range was not binding on its members, whenever a member tried to charge in excess, complaints were received from merchants and trade organisations.

Earlier, an inquiry report on the matter, prepared by CCP Director Shaista Bano and Deputy Director Syed Umair Javed, had found that PSAA, by recommending a range of charges for ancillary shipping services by its members, had violated Section 4 of the Competition Act, which prohibits trade associations from fixing or recommending prices to its members. Evidence in this regard was gathered from inspection of PSAA’s premises in Karachi, carried out by CCP officers in January this year.

CCP Chairperson Rahat Kaunain said due to the Commission’s efforts, trade associations had begun to understand the need for complying with the Competition Act and it was expected that the trend would grow in coming times.

Published in The Express Tribune, June 24th, 2011.

COMMENTS (1)

Iqbal Saeed | 12 years ago | Reply the way the shipping agents are imposing the hidden charges to the clients, they should be fined for one billion and not one million. the authority must draw the frame work to regulates and publish the rates each shipping agents charges to the clients.
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