Competition rules: No leniency to violators once CCP hands down verdict

Anti-trust watchdog amends regulations to stop violators from buying time.

Shahbaz Rana November 11, 2013
The CCP’s decisions could be challenged in a three-member appellate tribunal before taking them to higher courts. However, the government has not constituted the tribunal. PHOTO: FILE


The anti-trust watchdog has barred violators of competition law from seeking leniency once it is established by a bench of the Competition Commission of Pakistan (CCP) that they have violated the law, filling a major lacuna in its regulations that is exploited by the guilty to buy time.

The CCP has amended leniency regulations that allowed parties to take benefit of these rules even after an order is passed by a bench, said CCP Acting Chairman Dr Joseph Wilson here on Monday.

“Now the parties can seek leniency until the matter is under investigation and before the bench gives a verdict,” said Wilson while speaking at a press conference.

Under the 2007 regulations, the parties were claiming leniency after the issuance of an order besides challenging the CCP’s decisions in various courts aimed at seeking more time.

Wilson said the CCP was reviewing all the regulations, which were framed under the CCP Ordinance 2007. “The 2007 regulations were outside the ambit of the parent statute,” he added.

The CCP has also provided more protection to informers, but reduced their cash reward to Rs2 million from Rs5 million due to budgetary constraints. Penalties imposed by the CCP are deposited in the national kitty.

The CCP’s source of income is 3% fee that various regulators are supposed to contribute but they are not paying, sparking financial difficulties for the anti-trust watchdog.

The CCP is currently working below capacity, as it neither has a permanent chairman nor all posts of members are filled.

Since the PML-N government took power in June, there has been a strong feeling that the commission has been forced to slow down its activities, as its actions are hurting the businesses – which are traditional voters of the PML-N – involved in anti-competitive practices.

In reply to a question, Wilson said though the pace of its activities had slowed down, it had nothing to do with the government. “We are a bit more careful in research and inspection, which the businesses complain are bringing them in bad name,” said Wilson.

The biggest hurdle in  ensuring a level playing field to all market players and breaking cartels is the partial implementation of the CCP Act to date.

The CCP’s decisions are challenged in courts and in almost every case the courts grant stay orders. Over 90% of the cases decided by the CCP are in litigation, said Wilson.

The CCP’s decisions could be challenged in a three-member appellate tribunal before taking them to higher courts. However, the PML-N government has not constituted the tribunal, which has only one member.

Wilson said the tribunal had become dysfunctional, slowing the process of penalising the culprits.

However, he said despite serious challenges, the CCP was successful in many ways. For instance, Indus Motor agreed to revise its provisional buying order, which would give more comfort to its customers, said Wilson.

So far, the customers despite paying the entire amount in advance were uncertain about the final price, delivery time, quality of car and various specifications.

Wilson said since assuming charge of acting chairman at the end of August, he had taken steps to reorganise the CCP, which was earlier practically under the control of chairperson. The regulations designed for conduct of CCP business were amended, giving members more responsibilities, he added.

Wilson said previously the members did not have the right to bring any item on the agenda, giving an overarching role to the chairperson in deciding virtually everything.

Published in The Express Tribune, November 12th, 2013.

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