Supreme Court gives ruling in first-ever cartel case

Reduces penalty of Rs100m imposed on PPA to Rs25m

ISLAMABAD:

The Supreme Court (SC) of Pakistan has allowed Pakistan Poultry Association’s (PPA) appeal and reduced the penalty of Rs100 million imposed by the Competition Commission of Pakistan (CCP) to Rs25 million.

While deciding the firstever cartel case, it was taken into account that PPA’s advertisements were discontinued after a few days, ie, “after two days for eggs and five days for poultry”.

The SC has directed PPA to pay the penalty of Rs25 million within 15 days from the date of the order. CCP had imposed a fine of Rs100 million on PPA for price fixing of poultry products, in violation of Section 4 of the Competition Act 2010. Earlier, a civil appeal was filed on behalf of PPA against the judgement of the Competition Appellate Tribunal that upheld the order of CCP on February 29, 2016 for price fixing. Moreover, the SC has directed CCP to “frame and notify relevant rules inter alia relating to imposition of penalties”.

Currently, there exist guidelines on the imposition of financial penalties. Under Section 57 of the Act, the commission, with the approval of the federal government, has powers to make rules. The SC’s proceedings pertained to the CCP’s order wherein the commission found that PPA had discussed and approved an advertisement of prices of certain poultry products (concerning broiler chicken and chicken eggs) in the press, which was prohibited under the Competition Act.

Against the CCP’s order, first appeal was filed by PPA before the Competition Tribunal. “By advertising prices of poultry products in the national press, the appellant has prevented, restricted and reduced competition within the relevant market, which is a clear violation of Section 4 of the Act,” said the Competition Tribunal. It was observed that the findings recorded by CCP were “based on proper appraisal of relevant provisions of the competition law as well as other material brought on record. The same is, therefore, maintained.”