The Lahore High Court (LHC) has fixed April 15 for hearing a petition filed by Honda Atlas Cars (Pakistan) Limited, which has challenged the jurisdiction of the Competition Commission of Pakistan (CCP) in investigating alleged anti-competitive practices.
According to court documents, the Competition Commission had initiated an inquiry into the automobile sector in November 2018 after taking notice of alleged consumer exploitation, repeated price hikes and unfair sales terms by the leading industry players.
Honda Atlas was also covered in the probe based on suspected violations of Sections 3 and 4 of the Competition Act 2010, which pertain to the abuse of dominance and anti-competitive agreements.
Between 2018 and 2022, the commission issued at least five formal requests to the company, seeking information regarding car production, pricing policies, terms of vehicle booking, imports, vendor arrangements, localisation efforts and other operational data.
Documents show that Honda submitted multiple requests for extension in the deadline for providing complete information. Members of the CCP inquiry team also visited the company's manufacturing facility in July 2019 and March 2021.
In October 2022, the commission issued a detailed information request, seeking disclosure of investments made by Honda Japan and Honda Atlas Cars, pricing structures, dealer circulars, localisation ratios and financial records.
Responding to that, the company raised objections to the legality of the ongoing inquiry. The objections were made formally in an extension request dated December 3, 2022.
In June 2023, Honda filed multiple petitions in the Lahore High Court, including a petition that challenged the CCP's jurisdiction while proceeding with the investigation.
The company argued that trade and industry became provincial subjects following the 18th Amendment to the Constitution, and therefore the federal regulator had no authority to pursue such matters. The court granted an interim stay, halting the inquiry. Since then, more than 15 hearings have been held.
Judicial precedents cited in the documents, including the Supreme Court's judgement in the CCP vs Dalda Foods case, affirm that the Competition Commission has the authority to gather information, monitor markets and initiate inquiries.
The court in that case held that companies were obligated to comply with regulatory directives and should not seek judicial interference before a final order was passed.
At the time the inquiry was initiated, only three auto manufacturers operated in the market. The number has since grown to 13, making the issue of fair competition more pressing.
The court's decision in the case is expected to clarify the scope of the commission's powers and could set a precedent for future enforcement actions in high-stake industries.
COMMENTS
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ