The Competition Commission of Pakistan (CCP) is an independent quasi-regulatory, quasi-judicial body that helps ensure healthy competition between companies for the benefit of the economy.
The Commission prohibits abuse of a dominant position in the market, certain types of anti-competitive agreements, and deceptive market practices. It also reviews mergers of undertakings that could result in a significant lessening of competition. Combined with its advocacy efforts, the Commission seeks to promote voluntary compliance and develop a ‘competition culture’ in the economy.
The Competition Commission of Pakistan (CCP) was established on 2 October 2007 under the Competition Ordinance, 2007, which was repromulgated in November 2009. Major aim of this Ordinance was to provide for a legal framework to create a business environment based on healthy competition for improving economic efficiency, developing competitiveness and protecting consumers from anti-competitive practices.
Prior to the Competition Ordinance, 2007, Pakistan had an anti-monopoly law namely ‘Monopolies and Restrictive Trade Practices (Control and Prevention) Ordinance’ (MRTPO) 1970. The Monopoly Control Authority (MCA) was the organization to administer this Law. In the fast changing global and national economic environment, the MRTPO, 1970 was inadequate to address competition issues effectively. This was because:
i) the 1970’s law was out of date for a modernizing and rapidly transforming market economy;
ii) due to several limitations in the law, the MCA was not able to meet the expectations of businesses and the consumers at large;
iii) the first generation reforms that liberalized the economy and encouraged the private sector required a competition policy framework that could promote and protect competition and innovation.
The Government of Pakistan thus launched a programme to develop Competition Policy as a key “second generation reform” initiative. Towards this end, the Ministry of Finance and the MCA worked with the World Bank and the Department for International Development (DFID), UK. As a result of these efforts, Competition Ordinance, 2007 replaced the MRTPO.After getting approve, Competition Ordinance 2007 finally transformed into Competition Act 2010.
The Competition Act, 2010 considers the current economic realities as well as corrects the deficiencies of the MRTPO related to definitional aspects, coverage, penalties, and other procedural matters.
In line with modern competition regimes, the law adopts a ‘carrot and stick” approach - the law provides for higher fines combined with imprisonment for non-compliance; on the other hand, the carrot is sweetened with sophisticated leniency provisions that may eventually lead to no fines and imprisonment, subject to certain conditions. To maintain high standard of evidence for unearthing secret cartels, the Competition Commission has legal powers to conduct searches and inspections’.