Broadly, the primary difference lies in the object, scope and applicability of both legislations. The MRTPO, though promulgated for economic wellbeing, growth and development of Pakistan, was limited to undue concentration of economic power and abuse of monopolistic control, therefore it failed to cover other behavioral aspects of economic activity, which may result in exploiting consumers as well.

In contrast, the Act comprehensively provides for ensuring and protecting competition in all spheres of economic and commercial activity and encompasses a range of economic activity that may potentially also cause harm to consumers.

The current law is also in sync with international principles of competition law. Some significant provisions introduced are new tools of enforcement, in particular: enhanced penalty from PKR 1 lac to up to 10% of the turnover of an undertaking, power to conduct search and inspection, forcible entry and the power to grant leniency.

Under the Act, the Competition Commission has also been conferred with express administrative and functional autonomy, with the security of a 3-year term provided to the Members of the Commission, including the Chairperson.

MRTPO envisaged exclusion of some regulatory authorities in key sectors, whereas the Competition Act is all encompassing and sector blind. It applies to all undertakings including governmental bodies, regulatory bodies, natural or legal persons, corporate partnerships, associations, or trusts.

Another distinct addition is the statutory obligation to undertake advocacy, with the power to issue policy notes upon review of policy frameworks by other government bodies, with the objective to foster competition.

The Competition Ordinance 2007 was promulgated on 2 October 2007, and it transitioned into an Act on 6 October 2010.

Subsequent to the promulgation of the 2007 Ordinance, a 14-Members Bench of the Honourable Supreme Court passed a judgement in Sindh High Court Bar Association versus Federation of Pakistan and Others PLD 2009 SC 879M against the lapse of 37 Ordinances including the Competition Ordinance 2007 on 31 July 2009, stating inter alia that the same should be enacted as an Act of Parliament.

The Competition Bill 2009 was subsequently laid before the National Assembly on 14 October 2009. The Bill was then referred by the National Assembly to its Standing Committee on Finance and Revenue. The Standing Committee sent back the Bill to the House for approval on 12 November 2009. The Competition Ordinance 2009, having retrospective effect from 2 October 2007, was promulgated on 26 November 2009.

The Competition Bill 2010 was approved by the National Assembly on 27 January 2010 and then approved by the Senate of Pakistan on 24 February 2010.

The Competition Ordinance 2009 expired on 25 March 2010. Thereafter, the Competition ordinance 2010 was promulgated on 18 April 2010 and expired on 17 August 2010. In the meantime, the Competition Bill 2010 was passed by the Senate with certain amendments on 19 April 2010 and the National Assembly, after discussing the said amendments, passed the same on 23 September 2010. The Bill received the assent of the President and became the Competition Act 2010 on 6 October 2010 and was published in the Official Gazette on 13 October 2010.

Initially, in the 2007 Ordinance, the first and only appeal provision was to the Supreme Court. However, subsequently, the Act provided for the establishment of the Competition Appellate Tribunal, which is the first appellate body from Orders of two or more Members of the Commission.

Moreover, the Act provided that a search and inspection under Section 34 thereof would be subject to the requirement to have ‘reasonable grounds to be recorded in writing’ prior to authorizing the same.

The penalties provision was also amended, reducing the maximum penalty amount that can be imposed based on turnover from 15% to 10% and an increase in the maximum fixed penalty amount from PKR 50 million to PKR 75 million. Importantly, penalties collected by the CCP under the Act were to be deposited in the government treasury rather than with CCP itself as a part of the CCP Fund.

Yes. After a legal battle of over a decade, first in October 2020 then in 2021 and 2022, the Honourable Lahore, Islamabad and Sindh High Courts respectively decided it in favor of the Federal Government and the Commission, upholding the Act as being constitutionally valid and have dismissed challenges assailing the legislative competence of the Federation to enact law on competition.

• Abuse of Dominant Position (FAQs No. 9-11)
• Prohibited Agreements (FAQs No. 12-16)
• Deceptive Marketing practices (FAQs No. 17-26)
• Mergers (FAQs No. 27-40)

Relevant market means the market which shall be determined by the Commission with reference to a product market and a geographic market.

Comprises all those products or services which are regarded as interchangeable or substitutable by the consumers by reason of the products’ characteristics, prices and intended uses.

Comprises the area in which the undertakings concerned are involved in the supply of products or services and in which the conditions of competition are sufficiently homogeneous and which can be distinguished from neighboring geographic areas because, in particular, the conditions of competition are appreciably different in those areas.

Undertaking means any entity engaged in an economic activity, be it production of goods or provision of services. As per the Act, it means any natural or legal person, governmental body including a regulatory authority, body corporate, partnership, association, trust, or other entity in any way engaged, directly or indirectly, in the production, supply, distribution of goods or provision or control of services and shall include an association of undertakings.

Section 2(1)(e) of the Act describes a dominant position, which has two limbs. One is a presumption of law, that an undertaking’s market share exceeds 40%. Thus, where an entity holds a 40% share in the relevant market, it shall automatically be presumed to be dominant.

Second, is the deeming provision related to factual aspect, i.e., where it can be established that an undertaking possesses the ability to behave to an appreciable extent independently of competitors, customers, consumers, and suppliers. In such circumstances, an entity shall be considered dominant, even if its market share is less than 40%.

The Act also envisages a concept of collective dominance and abuse thereof. It is applicable where two or more undertakings collectively act and the behavior is abusive in terms of Section 3 of the Act, i.e., it prevents, restricts, reduces, or distorts competition in the relevant market by virtue of such dominance.

A monopoly per se is not prohibited under the Act, an undertaking can organically grow and acquire even 100% of market power. It is the abuse of such market power/dominance that constitutes a contravention of Section 3 of the Act.

However, in mergers, an entity can merge and acquire a market share so far such a merger does not substantially lessen competition by creating or strengthening a dominant position in the relevant market. Where the merger would result in creating or strengthening a dominant position of an undertaking, such transactions require stricter and greater scrutiny and are only allowed by the Commission where it meets the requirements of Section 11(10) of the Act read with the Competition (Merger Control) Regulations 2016.

Section 3(3) of the Act provides a non-exhaustive list of practices that can constitute an abuse of a dominant position. These include limiting production or sales, imposing other unfair trading conditions, price discrimination, tie-ins/bundling, imposing supplementary obligations, predatory pricing, and boycotting by a dominant undertaking in a relevant market. It is important to note that the law does not restrict considering other possible abusive situations

The term ‘agreement’ as envisaged under the Act is very broad and encompasses the ‘entering into’ any/or all practices, arrangements and understandings that come within the purview of Section 4(1) of the Act.

Section 2(1)(b) of the Act defines an agreement as including “any arrangement, understanding or practice, whether or not it is in writing or intended to be legally enforceable”. Thus, the prohibition under Section 4 of the Act pertains to all agreements whether these are: legally enforceable or not, with or without consideration and can also include mere acquiescence of the same in the form of practice or arrangement.

The Act does not define the term ‘cartel’. However, under Section 4, a non-exhaustive list of collusive practices, arrangement or agreement is provided as prohibited. Primarily, a cartel is a form of collaboration or cooperation and in effect a conspiracy amongst economic players that is bound to adversely impact the consumers and the economy.

For example, it can be an agreement or arrangement between two or more undertakings whereunder they collude with each other with the object or having the effect of inter alia of improving their own profitability, dictating pre-agreed economic terms, or ousting competitors.

A non-exhaustive list of certain agreements that are prohibited are listed under Section 4(2) of the Act. These include where two or more undertakings collude to fix the purchase or selling price or impose any other restrictive trading conditions, restrict output or production, allocate territories, limit technical development, and bid rigging.

A horizontal agreement is an agreement between undertakings which operate at the same level of production or distribution and are actual or potential competitors in the market. An example is a price-fixing agreement between two competing retailers.

Vertical agreements are supply and distribution contracts that undertakings operating at different levels of the production or distribution chain use to agree on specific terms and conditions relating to the purchase, sale or resale of products or services. An example is an exclusive dealing agreement between a supplier and a retailer, whereby the retailer agrees to only sell the supplier’s products.

Under Section 10 of the Act, any entity that distributes false or misleading information or makes a representation, omission, or practice that can be material in nature and is likely to mislead the consumer can be liable for taking part in deceptive marketing practices. Section 10(2) of the Act enumerates deceptive marketing practices as follows:

• the distribution of false or misleading information that is capable of harming the business interest of another undertaking;
• the distribution of false or misleading information to consumers, including the distribution of information lacking a reasonable basis, related to the price, character, method or place of production, properties, suitability for use or quality of goods;
• false or misleading comparison of goods in the process of advertising; or
• fraudulent use of another’s trademark, firm name, or product labeling or packaging.

The Commission has time and again considered a practice/representation/omission as deceptive from the perspective of an ‘ordinary consumer’, i.e., the usual, common, or foreseeable user or buyer of the product/service and the same is not necessarily restricted to the end user. Thus, the scope of the term ‘consumer’ is construed most liberally and in its widest amplitude.

For establishing a deceptive marketing practice, actual deception need not be necessary. It is sufficient that the same has potential to harm/mislead. It can also be deceptive for an undertaking to simply remain silent and/or to withhold or omit disclosures/material information.

Generally, it is such information that has the potential or capability of influencing consumer choices or the products and competition in the relevant market.

One of the tests applied is the "consumers are likely to have chosen differently but for the deception.”.

‘False information’ includes oral or written statements or representations that are contrary to truth or fact and not in accordance with the reality or actuality and usually imply either conscious wrong or culpable negligence.

'Misleading information’ includes oral or written statements or representations that are:

(a) capable of giving wrong impression or idea;
(b) likely to lead into error of conduct, thought, or judgment;
(c) tend to misinform or misguide owing to vagueness or any omission; and
(d)may or may not be deliberate or conscious

‘False information’ includes oral or written statements or representations that are contrary to truth or fact and not in accordance with the reality or actuality and usually imply either conscious wrong or culpable negligence.

'Misleading information’ includes oral or written statements or representations that are:

(a) capable of giving wrong impression or idea;
(b) likely to lead into error of conduct, thought, or judgment;
(c) tend to misinform or misguide owing to vagueness or any omission; and
(d)may or may not be deliberate or conscious

Forms of dissemination may include:
a. Advertisements;
b. Product packaging/labelling;
c. Social media
d. Testimonials/endorsements
e. Websites/platforms
f. Information provided by staff/agent, whether verbally or in writing
g. Print media
h. Television & Radio; and
i. Any other marketing medium

There must be some independent and recognizable substantiation for any/all representations made prior to marketing the same, particularly, when undertakings make representations which are specific in nature and can be quantified and/or qualified.

Trademarks, firm name, product labeling and packaging design are the basic differentiating factors between products and services. Where one entity fraudulently copies or passes off the other’s trademark or trade dress, it is deceptive under Section 10(2)(d) of the Act as it may lead to consumer confusion regarding the goods and can negatively impede the business of another undertaking.

It is important to highlight that unlike the Intellectual Property Organization of Pakistan (“IPO”), the Commission does not determine or advise on the allocation/availability of trademarks nor deals with its registration. Importantly, the Commission is not a declaratory forum to be approached when there is a dispute as to the ownership of the trademark. The entire focus revolved around Section 10 of the Act if, with respect to a trademark or its usage, there is deceptive marketing.

Disclosures must be made clearly and conspicuously. Undertakings should ensure that any disclosures made are inter alia:

• Prominently/instantly visible;
• Adequately presented;
• Appropriately placed;
• Large/clear font – bold and legible
• Bright/conspicuous colors distinct from the surrounding; and
• In the same language as the rest of the advertisement

Section 2(1)(h) of the Act defines a ‘merger’ as “the merger, acquisition, amalgamation, combination or joining of two or more undertakings or part thereof into an existing undertaking or to form a new undertaking; and expression “merge” means to merge, acquire, amalgamate, combine or join, as the context may require.”

Regulation 3 of the Competition (Merger Control) Regulations 2016 (“Merger Regulations”) also provides the following transactions as examples of a ‘merger’:

• Merger, acquisition, amalgamation, combination or joining of two or more undertakings (or part thereof) into an existing undertaking or to form a new undertaking.
• An undertaking is absorbed by another, where the latter retains its legal entity and the former ceases to exist.
• One or more undertakings acquire direct or indirect control of the whole or part of one or more other undertakings.
• The result of an acquisition by one undertaking (or a substantial part thereof) of the assets or shares of another undertaking in order for the first undertaking to replace the second undertaking in the business.
• A collaborative arrangement by which two or more undertakings devote their resources to pursue a common objective, provided that such arrangement is subject to joint control, is for the purpose of performing functions independently and is on a lasting basis.
• Importantly, joint ventures also fall under the definition of a ‘merger’.

The pre-merger notification thresholds are provided under Regulation 4 of the Merger Regulations as follows:

Value of gross assets is not less than PKR 300 million; OR

Combined value of the undertaking and the undertaking whose shares are to be acquired or the undertakings being merged is not less than PKR 1 billion; OR

Annual turnover (for the preceding year) is not less than PKR 500 million; OR

Combined turnover of the undertaking and the undertaking whose shares are to be acquired or the undertakings being merged is not less than PKR 1 billion;

AND

Transaction/asset value is of PKR 100 million or more, OR

Where shares are being acquired, the acquired shares together with voting shares, if any, held by the acquirer, entitle the acquirer to more than 10% voting shares.

Yes. Under Section 11 of the Act, all undertakings must apply for prior clearance from the Commission before giving effect to the intended merger, subject to meeting the pre-merger notification thresholds.

It is not mandatory that all merger parties make individual pre-merger applications. Any merger party can apply for clearance from the Commission and the parties can make a joint application, if they so like. Generally, the party intending to acquire the asset or shares is the notifying party. The Commission’s merger approval order would grant approval of the whole merger transaction.

However, regardless of who files for pre-merger clearance, a notice of the intent to submit an application or that the same has already been submitted must be provided by the applicant merger party to the other merger parties as per Regulation 8 of the Merger Regulations thereof.

Yes, where they are doing business in Pakistan, have presence in Pakistan and/or the intended merger relates to matters that take place or have the effect in Pakistan.

The turnover thresholds shall be met in either of the following cases:

(i) The Acquirer’s annual turnover in the preceding year is not less than PKR 500 million
OR
(ii) the combined turnover of both the Acquirer in the Target, or the merging entities (or of the joint venture partners as the case may be) in the preceding year is not less than PKR 1 billion

The transactions falling under Regulation 5 are generally exempted by the Commission from pre-merger notification. These are:

• A transaction in which a holding company increases its stake in its subsidiary or the subsidiaries thereof or if such subsidiary acquires or increases their equity investment in each other;
• A transaction in which a holding company merges, amalgamates, combines or ventures jointly with its subsidiary or the subsidiaries thereof merge, amalgam, come or venture jointly with each other;
• A transaction in which a bank or an insurance company or an investment company deals in trading of shares for its own account for the purpose of earning dividend income and capital gains and not with the intention of acquiring controlling interest in the investee company;
• Shares acquired by succession or inheritance;
• Shares acquired as a gift from one’s spouse or immediate blood relatives;
• Shares acquired through will;
• Voting shares acquired by a person, acting as securities underwriter in ordinary course of business;
• Voting shares allotted pursuant to a right issue; provided that the voting securities acquired do not increase, directly or indirectly, the acquiring person’s per centum share of outstanding voting securities of the issuer;
• Where an undertaking, the normal market activities of which include the carrying out of transactions and dealings in securities for its own account or for the account of others, acquires securities of another undertaking and sells back the acquired securities on pre-determined price within a period of 6 months from the date of such acquisition;
• Real property of goods acquired in the ordinary course of business if the person who intends to acquire the assets shall not, as a result of the acquisition, hold all or substantially all of the assets of a business or of an operating segment of the business; and
• Unexplored real resource property acquired for the purpose of exploration or development.

Phase I pertains to mainly assessing whether the intended merger meets the pre-merger notification thresholds and whether any merger party meets the presumption of dominance as defined under the Act, i.e., having 40% market share or have the ability to behave to an appreciable extent independently of its competitors, customers, consumers and suppliers.

Finding a presumption of dominance in Phase I leads to a Phase II review, which requires a more in-depth analysis to ascertain whether the intended merger substantially lessens competition by creating or strengthening a dominant position in the relevant market.

The Commission can impose any conditions to remedy any possible anti-competitive effects and/or maintain/improve competition in a relevant market.

Particularly, conditions are likely to be imposed by the Commission after a Phase II review where the merger transaction is likely to substantially lessen competition by creating or strengthening a dominant position.

For instance, the Commission can require that the merger parties shall not impose any horizontal or vertical restraints, require commitments, or impose conditions with the objective of improving efficiency of production or distribution of goods and/or promote technical or economic progress.

The Commission shall, inter alia, consider the following factors as per Regulation 10 of the Merger Regulations:

• Strength of competition in the relevant market
• Probability that merger parties in post-merger scenario shall behave competitively or co-operatively
• Actual and potential level of import competition in the market
• Ease of entry into the market – including tariffs and regulatory barriers
• Level and trends of concentration as well as history of collusion in the market
• Degree of countervailing power
• Dynamic characteristics of the market including growth, innovation & product differentiation
• Nature & extent of vertical integration
• Whether the business or part of the business of the merger party has failed or is likely to fail
• Removal of an effective competitor

As per Section 11(10) of the Act, if the intender merger is found to substantially lessen competition by creating or strengthening a dominant position, the Commission may still approve the transaction if it is shown that:

• the merger contributes substantially to the efficiency of the production or distribution of goods or to the provision of services;
• Such efficiency could not reasonable have been achieved by less restrictive means;
• The benefits of such efficiency clearly outweigh the adverse effect of the absence or lessening of competition; or
• It is the least anti-competitive option for the failing undertaking’s assets, when one undertaking is faced with actual or imminent financial failure.

Yes. As per Section 11(13) of the Act, the Commission can, within one year of a merger approval order, review the conditions placed on the merger parties in an order on application of the undertakings concerned or on its own.

The pre-merger application is made pursuant to Section 11(3) of the Act, which shall be in the form and accompanied with the applicable fee as prescribed under Regulation 6 of the Competition (Merger Control) Regulations, 2016.

The pre-merger application form is attached as Schedule I to the Merger Regulations. Broadly, merger parties must disclose:

• Information related to the merger parties, i.e., contact information, areas of operation, directors, and the authorized representative.
• The transaction details including the transaction value.
• The relevant market
• Market shares and basis of calculation as well as market shares of main competitors, if any
• The post and pre-merger structure
• Details concerning any group or associated companies including business operations and whether there is any overlap with the merger entity.

The Commission shall complete a first phase review within 30 working days.
The Commission shall complete the second phase review within 90 working days.
The timeline shall only begin upon completion of all requisite information by the merger parties.

If the Commission makes to a make a determination in its Phase I Review, the same shall mean that the Commission has no objection to the intended merger.

The Applicant must prove to a sufficient degree that the agreement requiring exemption substantially contributes to:

(a) improving production or distribution;
(b) promoting technical or economic progress, while allowing consumers a fair share of the resulting benefit; or
(c) the benefits of that clearly outweigh the adverse effect of absence or lessening of competition.

The Applicant.

Ancillary restraints are restrictions directly related and necessary to the implementation of the merger. Presence of the following lends guidance as to when the Commission may consider restrictions so directly related and necessary to the merger:

• Restrictions must be closely linked to the merger itself.
• Restrictions which are directly related to the merger are economically related to the main transaction and intended to allow a smooth transition to the changed company structure after the merger.
• In the absence of those agreements, the merger could not be implemented or could only be implemented under considerably more uncertain conditions, at substantially higher cost, over an appreciably longer period or with considerably greater difficulty.

Yes, ancillary restrictions must also be assessed and approved by the Commission before the same are implemented by parties.

The form for filing an exemption application is provided under Schedule-I (Form of Applications for Exemptions) titled Form A under the Competition (Exemption) Regulations, 2020 and fee for filing such an application is provided under Schedule-II, i.e., the Revised Fee Schedule Exemption 2020.

The Commission has been established to carry out the administrative function of the executive to ensure economic efficiency and promote consumer welfare and in doing so it discharges quasi-judicial functions with the sole objective to regulate anti-competitive behavior. It is administratively and functionally independent

It has the following functions:

• to initiate proceedings in accordance with the procedures of the Act and make orders in cases of contravention of the provisions of the said Act;
• to conduct studies for promoting competition in all sectors of commercial economic activity;
• to conduct enquiries into the affairs of any undertaking as may be necessary for the purposes of this Act;
• to give advice to undertakings asking for the same as to whether any action proposed to be taken by such undertakings is consistent with the provisions of this Act, rules or orders made there under;
• to engage in competition advocacy; and
• to take all other actions as may be necessary for carrying out the purposes of this Act.

Its enforcement tools and powers to ensure free and fair competition in markets in Pakistan include:

• conducting enquiries into possible anti-competitive practices either on its own or after receiving a complaint or reference from the Federal Government.
• It has powers of a civil court under the Code of Civil Procedure 1908 in relation to a proceeding or enquiry to summon and enforce the attendance of any witness and examine him on oath, discovery and production of any document or other material as evidence, accept evidence on affidavits, requisitioning of any public record from any court or office and issuing of a commission for the examination of any witness, document or both.
• It can also call upon an undertaking to furnish any information concerning the activities of the undertaking through general or special order.
• Conducting search and inspections on the premises of undertakings
• Investigating mergers and acquisitions that may have the potential to substantially lessen competition in a market
• Protect consumers and businesses from deceptive marketing practices.
• Encourage and advise government bodies and other regulatory authorities through issuance of policy notes on policy matters in order to promote and encourage free and fair competition.
• Imposing penalties and other remedial orders against businesses and individuals that take part in cartels or any other anti-competitive behavior prohibited under Chapter II of the Act.

The Commission Fund is utilized by the Commission to meet its charges in connection with the functioning of the Commission. It consists of:

(a) allocations or grants by the Federal Government,
(b) charges and fees levied by the Commission,
(c) contributions from local and foreign donors or agencies with the approval of the Federal Government,
(d) returns on investments and income from assets of the Commission,
(e) all other sums which may in any manner become payable to or vested in the Commission, and
(f) a percentage of the fees and charges levied by other regulatory agencies in Pakistan.

The Commission after a struggle of over a decade finally achieved financial autonomy in October 2020.

Under the Act, 3% of fees and charges levied by the regulatory bodies (to be notified by the Federal Government) had to be contributed to the CCP Fund. The five notified regulatory bodies are Securities and Exchange Commission of Pakistan (SECP), Pakistan Telecommunication Authority (PTA), National Electronic Power Regulatory Authority (NEPRA), Pakistan Electronic Media Regulatory Authority (PEMRA) and Oil and Gas Regulatory Authority (OGRA). Except one which had paid partly all have commenced payments after the Cabinet decision in October 2020.

The Commission may initiate an enquiry:

(a) on its own;
(b) upon reference by the Federal Government; or
(c) upon filing a complaint by an undertaking or a registered association of consumers pertaining to such facts as appear to constitute a contravention of the provisions of the Act, i.e., Sections 3, 4, 10 or 11.

The following stages are involved:

• Upon concerns raised regarding possible violations of Competition Act, 2010, a preliminary probe is conducted by the department concerned. In case the said probe justifies initiation of proceedings, a working paper is prepared on the basis of prima facie evidence of potential violations of the Act, which is placed before the Commission for granting necessary approval to conduct and initiate a formal enquiry into the matter.
In case of a complaint in writing, the Commission shall first assess and examine whether (i) the application/complaint is frivolous or vexatious or (ii) based on insufficient facts, or (iii) is not substantiated by prima facie evidence. If the complaint constitutes such facts that appear to be a contravention of the provisions of the Act, a working paper is placed before the Commission by the concerned department either to initiate an enquiry if it is so warranted or initiate proceedings under Section 30 of the Act.
• After approval of working paper, the Commission constitutes enquiry committee to investigate the matter or to initiate proceedings under Section 30, as the case may warrant
• The enquiry committee upon completion of the enquiry report submits its findings and/or recommendations before the Commission. The Commission then forms an opinion whether such findings warrant initiation of show-cause proceedings under Section 30 of the Act.
• Where such approval is granted, the Registrar of the Commission, issues a show cause Notice to the concerned undertaking(s) or association of undertakings, providing a complete copy of the enquiry along with its annexures, giving the undertaking an opportunity of being heard on such dates as may be notified by the Office of the Registrar.
• Upon conclusion of the hearing(s), the Commission issues an Order in this regard.

Yes, the Order of the Commission may be challenged by way of Appeal before:

• Appellate Bench of the Commission in respect of an order made by any Member or authorized officer of the Commission.
• Competition Appellate Tribunal (CAT) by any person aggrieved by an order of the Commission comprising two or more Members or of the Appellate Bench of the Commission
• Supreme Court of Pakistan by any person aggrieved by an order of CAT.

Yes, if the Commission is of opinion that the issuance of a final order in the proceedings is likely to take time and that, in the situation that exists or is likely to emerge, serious or irreparable damage may occur and an interim Order is necessary in the public interest, it may, after giving the undertaking concerned an opportunity of being heard, by order, direct such undertaking to do or refrain from doing or continuing to do any act or thing specified in the order. It may be noted that for issuance of interim order, the issuance of a show-cause notice is a pre-requisite, i.e., initiation of proceedings.

• Within 30 days of the passing of order by single Member or authorized officer of Commission, to the Appellate Bench of the Commission.
• Within 60 days of communication of order of Commission comprising two or more Members or of the Appellate Bench, to the CAT.
• With 60 days, to the Hon’ble Supreme Court of Pakistan against order of CAT.

The Enquiry Officers are delegated the powers under Section 33 of the Act by the Commission, which broadly include:

(a) summoning and enforcing the attendance of any witness and examining him on oath;
(b) discovery and production of any document or other material as evidence;
(c) accept evidence on affidavits;
(d) requisitioning of any public record from any court or office;
(e) issuing of a commission for the examination of any witness, document or both;
(f) requiring an undertaking to produce before, and to allow to be examined and kept by, an officer of the Commission specified in this behalf, any books, accounts, or other documents in the custody or under the control of the undertaking so required, being documents relating to any matter the examination of which may be necessary for the purposes of this Act; and to furnish to an officer so specified such information in its possession, relating to any matter as may be, necessary for the purpose of this Act.

Yes, the Commission for reasonable grounds to be recorded in writing has the power to authorize any officer to enter and search any premises for the purpose of enforcing any provision of the Act.

Yes, if an undertaking refuses without reasonable cause to allow the Commission to exercise the powers contained in Section 34. However, an investigating officer of the Commission can only forcibly enter after obtaining a written order signed by two Members of the Commission.

The Commission powers are not unique in that similar powers have been conferred upon other regulatory authorities in Pakistan such as SECP under Part VIII of the Securities and Exchange Commission of Pakistan Act, 1997.

Many competition agencies abroad have similar powers. For instance, the Competition Act 1998 (UK) provides the Competition Markets Authority (formerly the OFT) with powers to investigate, which enable the CMA, UK to enter business premises without a warrant.

The European Commission also has similar powers to demand written information, enter premises (dawn raids) and demand company information without a warrant.

Also, the authorization/decision of national competition authorities is sufficient to conduct inspections of business premises of undertakings in Belgium, Cyprus, Czech Republic, Finland, Luxembourg, Malta, Romania and Slovakia. The Turkish Competition Authority also has the power to carry out on-site inspections as per Article 15 of the Turkish Competition Act.

The European Commission generally conducts ‘dawn raids’, which are unannounced inspections of company premises. Whereas, the Commission generally informs the undertaking concerned that its authorized officers shall be carrying out a search and inspection of the premises.

No. The police officials are only there for the safety of the Commission officers and to assist where necessary. Such police officials ordinarily do not enter the premises of an undertaking along with the Commission officers.

If the Commission determines that an undertaking:

(a) has been found engaged in any activity prohibited under this Act;
(b) has failed to comply with an order of the Commission made under this Act;
(c) has failed to supply a copy of ,the agreement or any other documents and information as required under this Act or requisitioned by the Commission;
(d) has furnished any information or made any statement to the Commission which such undertaking knows or has reason to believe to be false or found by the Commission to be inaccurate; or
(e) knowingly abuses, interferes with, impedes, imperils, or obstructs the process of the Commission in any manner:

For a contravention of any provision of Chapter II of this Act, a fixed penalty in the amount not exceeding seventy-five million rupees or an amount not exceeding ten per cent of the annual turnover of the undertaking, as may be decided in the circumstances of the case by the Commission. The Guidelines on Imposition of Financial Penalties have also been issued by the Commission

Complaint/reference/application shall state-

a. Name of the person making the complaint/reference/application
b. Address in Pakistan for delivery of notice/document;
c. Telephone number, fax number and electronic mail address, if available;
d. Mode of service of notice/documents to be used;
e. Name and address(es) of respondents(s); and
f. Name and address of authorized representative, if any;

Complaint/reference/application shall contain-

a. A brief statement of facts;
b. A summary of the alleged contravention of the Act;
c. A succinct presentation in support of each contravention;
d. Such other particulars as may be specified by the Commission;
e. A schedule listing all documents/affidavits/evidence in support of each of the presentations; and
f. Relief(s) sought

Fee for filing of complaint is stipulated as follows:

i. For violations of Section 3 prohibitions under the Act – Rs. 50,000/-
ii. For violations of Section 4 prohibitions under the Act – Rs. 50,000/-
iii. For violations of Section 10 prohibitions under the Act;

• For individual undertakings, i.e., sole proprietors/businessman/service provider – Rs. 5,000/-
• For body corporate/legal persons – Rs. 50,000/-

The Commission, in its discretion, may waive a fee where a complaint is filed through the platform of a consumer association.

The form for filing memorandum of Appeal is provided under Rule 7 and fee for filing such an Appeal is given under Schedule I (Table of Fees) of Competition Commission (Appeal) Rules, 2007.

As per Regulation 33 of the Competition (General Enforcement) Regulations, 2007, the Commission may, in its discretion, issue a favorable decision where commitments submitted by an undertaking concerned have been accepted.

As per the Regulation, if the requirements are met the Commission shall limit itself to imposing a penalty of up to PKR 7,500,000 or 1% of the annual turnover of the undertaking for each violation on the concerned undertaking.

As per Section 39 of the Act, the Commission, if it is satisfied that the undertaking which is a party to a prohibited agreement and is alleged to have violated Chapter II prohibitions, has made a full and true disclosure in respect of the alleged violation, impose on such undertaking a lesser penalty as it may deem fit.

The Commission has defined ‘Leniency’ as “a concession granted to a cartel member who admits the contravention and also provides critical evidence of the alleged or otherwise cartel conduct of the accomplices and commits to abandon such behavior.”

This process broadly entails an admission of guilt by the applicant undertaking that is a participant/party in a prohibited agreement or practice, an undertaking that it is no longer a part of the prohibited agreement or practice and provision of all evidence available regarding the alleged prohibited agreement.

Yes, the Commission has issued the Competition (Leniency) Regulations 2019 in this regard (the Leniency Regulations).

An undertaking failing to provide sufficient evidence for grant of immunity in relation to a prohibited agreement in one market may be considered for reduction in the amount of financial penalties based on its cooperation in relation to a prohibited agreement in another market.

Subject to the Regulation 5 of the Leniency Regulation as a minimum to meet the conditions for Leniency Plus by the Commission, the information provided by an undertaking under the Leniency Regulations must be such as to provide the Commission with sufficient basis to take forward a credible investigation or to provide significant added value to the Commission’s investigation.

Upon the Applicant’s request, the Commission shall endeavor to the extent that is consistent with its obligations to disclose or exchange information in accordance with the Act, to keep the identity of the Applicant confidential under the decision of the Commission to grant Leniency has been made or until such time as deemed appropriate by the Commission.

An undertaking can obtain up to 100% reduction in financial penalty.

The applicant undertaking must satisfy the following:

• It is the first to submit evidence which enables the Commission to carry out an investigation in connection with the alleged prohibited agreement under the Act and the Commission does not already have sufficient information to establish the same;
• It provides the Commission with all evidence available in a timely manner;
• It does not conceal, destroy, manipulate or remove any crucial evidence;
• Makes current and/or former persons available for interviews with the Commission who are associated with the participants and parties to the alleged prohibited agreement;
• Maintains continuous and complete cooperation throughout the proceedings until conclusion of the same;
• Refrains from further participation in the alleged prohibited agreement; and
• Has not taken any steps to coerce another undertaking to take part in the alleged prohibited agreement.

No. Only the first undertaking to approach the Commission with evidence of the cartel/prohibited agreement and which fulfills the conditions provided in the Leniency Regulations will obtain complete immunity from or reduction in financial penalty.

Subject to the Regulations, where the applicant undertaking provides the Commission with material, additional, contemporaneous evidence within the time-period stipulated, i.e., after issuance of a show cause notice and before the passing of an order. Moreover, that such additional evidence was previously unknown to the Commission and it represents significant added value with respect to evidence that is already in the Commission’s possession.

Either prior to the issuance of a show cause notice under Section 30 of the Act or before the Commission has passed its order under Section 31 of the Act after initiation of the show cause proceedings.

Such information may include:

• Identity and contact details
• Details of the parties to the alleged prohibited agreement
• Affected product(s), market(s) and territories
• Nature of the alleged prohibited agreement and its estimated duration/period
• All evidence available at the time of the said leniency application

An undertaking shall apply through a properly authorized representative and receive a marker, reserving its place in a queue for a period so determined by the Commission in order to allow the undertaking to gather the necessary evidence.

The Commission considers the stage at which the undertaking comes forward, the evidence it has already gathered and the quality and nature of the evidence provided. Importantly, the undertaking shall make a full a true disclosure of all the facts.

The undertaking shall then contact the Commission through its authorized representative. The initial contact shall be with the DG, C&TA either through telephone or email. After which, an officer at the rank of Director or above shall be designated by the Chairperson to liaise with the applicant.

In the landmark Order of the Commission in the matter of Siemens (Pakistan) Engineering Company Ltd in 2012, the Commission granted 100% immunity to Siemens (the Applicant) for penalties related to inter alia price fixing in the switchgear market as well as 100% reduction in penalty with respect to other Section 4 contraventions in the switchgear and transformer market.

The Commission’s findings in the Siemens 2012 Order subsequently led to the World Bank recently unearthing a ‘racket’ in Pakistan of 23 companies on grounds of corrupt, fraudulent, collusive and/or coercive practices in the electricity transmission equipment market in June 2021. The findings included evidence of bid rigging and, as a result of the same, the World Bank had imposed administrative sanctions of debarment on at least two of the cartel/group members.

An informant can be any person providing the Commission with the information regarding the prohibited activity under Section 4 of the Act.

Information means and includes material information about the involvement of an undertaking in a prohibited activity, which is only known by the board of directors, management and/or employees of an undertaking but not by the public. This can include minutes of meetings, emails, fax transmissions and voice or video recordings.

The Commission may grant a reward ranging from PKR 200,000/- to PKR 2 million to an Informant for provision of the requisite information as defined in the Informant Regulations.

The reward shall be paid in two parts:

(i) initially 30 days of receipt by the Commission of the complete information; and
(ii) the second payment shall be within 60 days of conclusion of the enquiry, if necessary, and issuance of a show cause notice as the case may be.

The quantum of reward shall depend on any or all of the following factors:

• Accuracy, usefulness and effectiveness of the information provided under the Informant Regulations.
• Efforts made by the Informant and the nature of cooperation extended by the Informant.
• The seriousness of the prohibited activity.

The Informant may make initial contact with the Commission either via phone or otherwise, without disclosing his/her identity. After initial contact, an officer not ranking less than a Director shall be designated by the Chairperson to liaise with the Informant.

The Commission shall, to the extent that is consistent with its obligation to disclose or exchange information, keep the identity of the Informant confidential.

Competition law enforcement promotes healthy competition and prevents anticompetitive business practices to help ensure:

• businesses compete fairly
• markets are free and competitive
• quality goods & services for consumers
• helps reduce prices
• it fosters innovation and
• encourages businesses to produce and boosts the economy in general.

While enactment of competition law is a commitment to uphold competition policy principles, however, like in some other countries we do not have a formal national competition policy in existence.

Competition policy is commitment to apply competition law principles for ensuring that businesses compete fairly with each other. Competition policy is vital for all; be it an individual economic agent, SMEs, big industries, or the end consumer.

It aims at creating opportunities for all, preventing distortion of market and protection from anticompetitive practices to help the economy become vibrant. Competition policy may further help to strengthen and to address inter alia:

• provision for third party access to nationally significant infrastructure
• introduction of competitive neutrality so that government businesses do not enjoy unfair advantages when competing with private businesses
• restructuring of public sector monopoly businesses to increase competition; review of all laws which restrict competition and
• extending prices surveillance arrangements to Federal and Provincial Government participation in businesses and to deal with such circumstances where all other competition policy reforms prove inadequate.

Global Competitive Index (GCI) is an evaluation of the competitiveness of the economies of countries around the world.

It is calculated annually by the World Economic Forum (WEF) and integrates the macroeconomic and the micro/business aspects of competitiveness into a single index.

Since, 2005 the new method re-evaluates the 12 pillars of competitiveness that include: Institutions, Infrastructure, Technological Maturity/ICT adoption, Macroeconomic Environment/ Stability, Health, Education and Skills, Goods Market, Labor Market, Financial System, Market Size, Business Dynamics, Innovation Capacity/Capability.
It is a measure of a country's ability to provide the conditions for productivity growth and conducive environment for investment and better quality of life for its citizens.

Broadly speaking, promoting competition, or enforcing competition principles invariably results in consumer welfare. However, consumer welfare initiatives may not always be pro-competitive, such as enforcing law with the focus on protective measures for consumers or small businesses may not always necessarily entail enforcing competition principles e.g., fixing and reducing prices, granting subsidies, quota allocation and other protective measures.

The Competition Act envisages in its preamble promoting competition in all spheres of commercial and economic activity. A Competition Authority is different in that it is sector-blind and not a sector specific regulator. Competition is not limited to a single industry or commodity or sector.