Telcos lose petitions against CCP

The Islamabad High Court (IHC) has upheld the jurisdiction of the Competition Commission of Pakistan (CCP) to inquire into deceptive marketing and anti-competitive conduct in the telecom sector, dismissing multiple petitions filed by major telecom operators seeking to block CCP proceedings.

The court dismissed writ petitions instituted by Pakistan's leading telecom operators, including Jazz, Telenor, Zong, Ufone, Warid, Pakistan Telecommunication Company Limited (PTCL), and Wi-Tribe. These petitions challenged the issuance of show-cause notices by the CCP under various provisions of the Competition Act, 2010. The petitions had been filed over several years and were clubbed together for adjudication due to common questions of law. Justice Inaam Ameen Minhas, in a detailed 19-page judgment, held that the CCP had lawfully exercised its powers under the Competition Act, 2010, when issuing the show-cause notices to telecom operators over alleged misleading advertising and the imposition of additional service charges on prepaid customers.

The court stated that the CCP's mandate under Section 28 of the Act enables it to conduct inquiries and issue show-cause notices wherever prima facie violations are identified.

The petitions related to show-cause notices issued between 2013 and 2014 to cellular mobile operators for allegedly levying hidden "service maintenance" or "recharge" fees on prepaid cards, a practice the CCP deemed to fall within deceptive marketing under Section 10(2)(b) of the Act. Additionally, PTCL and Wi-Tribe had also contested notices issued for advertising "unlimited internet packages" which were, in practice, subject to fair usage policies, a matter also examined under Section 10 of the Act.

Rejecting the petitioners' contention that the Pakistan Telecommunication Authority (PTA) held exclusive jurisdiction over competition matters within the telecom sector, the IHC observed that both statutes – the Pakistan Telecommunication (Re-organisation) Act, 1996, and the Competition Act, 2010 - operate in distinct yet complementary domains.

The judgement clarified that the PTA regulates licensing, technical and operational matters under the 1996 Act, whereas the CCP exercises its mandate to prevent anti-competitive behaviour, abuse of dominance, collusive arrangements, and deceptive marketing under the 2010 Act. The IHC in para 22 of the judgement held, "The CCP possesses overarching jurisdiction, across all sectors of the economy, including telecommunications. Its functions are not limited to mere regulation but extend to the prevention and prohibition of anti-competitive behaviour, abuse of dominance, collusive arrangements, and deceptive marketing practices."

The judgement also noted that the definition of "undertaking" in Section 2(1)(q) of the Competition Act includes any natural or legal person, governmental body, or regulatory authority engaged in commercial activities. Therefore, the CCP's jurisdiction extends even to instances where the conduct of regulatory bodies may fall within the scope of the Act.

In another petition (WP 2757/2023), PTCL had sought to block an inquiry initiated by the CCP into alleged discriminatory pricing in fixed local loop (FLL) services. This petition, which also challenged the issuance of a show-cause notice, was similarly dismissed.

The court further held that the petitions were premature, as show-cause notices are procedural and do not constitute final or adverse orders. Justice Minhas observed that adequate statutory remedies existed under Sections 31 and 41 of the Act before the Commission, its Appellate Bench, and the Competition Appellate Tribunal.

"Interference at this initial stage would amount to obstructing a statutory body from performing its lawful functions and would jeopardise the intent of the legislature behind the Competition Act 2010," the judgment stated.

Holding that the CCP acted within its statutory authority in investigating deceptive and anti-competitive practices in the telecom sector, the IHC dismissed all seven connected petitions as "not maintainable."