Strengthening CCP: Government to tighten noose around cartels

PM aide to give recommendations on shielding consumers from collusive practices

ISLAMABAD: The Pakistan Tehreek-e-Insaf (PTI) government has decided to strengthen the Competition Commission of Pakistan (CCP) in a bid to tighten the noose around cartels for recovering the penalties imposed on them.

The move comes as different sectors, allegedly involved in cartelisation, have filed cases in courts, which have remained pending since 2009.

CCP authorities have informed the government that a relevant law was the major challenge confronting the commission. As a result, 127 court cases have been pending adjudication, some of them since 2009, before high courts. In addition to that, the Competition Appellate Tribunal is also not functional because of vacant position of a member since January 2019.

The government has tasked the adviser to prime minister on institutional reforms and austerity with examining the CCP structure and giving recommendations on strengthening the commission so that it could effectively guard consumers against collusive practices.

The CCP chairperson gave a presentation to the cabinet on the role, functions and challenges faced by the commission as well as collusive practices prevalent in the flour and sugar industries.

It was informed that the Competition Act 2010 provides for free competition in all spheres of commercial and industrial activity to enhance economic efficiency and protect consumers from anti-competitive behaviour.

Pillars of the Competition Act tackle abuse of dominant position, prohibited agreement, deceptive marketing and mergers as well as acquisitions. It was informed that 2,399 enforcement actions have been taken in the last 12 years including 664 show-cause notices and 122 enforcement orders.

Regarding action against collusive practices by flour mills, it was informed that the commission took notice of the sharp increase in prices of wheat flour reported in various newspapers. A raid on the Pakistan Flour Mills Association premises was carried out and a formal inquiry was initiated.

The findings revealed that prima facie the association was fixing prices of wheat flour and sharing commercially sensitive information and strategic data. The production quota of each mill was also being fixed by the association.

During the discussion, concern was expressed that the rate of recovery of penalties being imposed by the CCP was extremely dismal. The CCP chairperson explained that the low recovery rate was because the companies being fined kept challenging the constitutionality of Competition Act 2010.

The cabinet also directed the Law and Justice Division to process the filling of vacant position of the member of Competition Appellate Tribunal on priority.

Consumers have been facing higher prices of sugar. The CCP took up the matter and a cost audit of the sugar industry for the crushing season 2016-17 was concluded in October 2019. Financial and costing information of 65 sugar mills was reviewed, however, no sign of collusive behaviour was found in the sugar industry.

Published in The Express Tribune, December 19^th, 2019.

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