BACKGROUND:

Mobilink GSM acquired the rights to sell Blackberry devices in Pakistan pursuant to a Master Supply Agreement dated 16-11-2005.

On 19-07-2007, a show-cause was issued to Mobilink GSM for carrying out unreasonable restrictive trade practice as it was selling the product, Blackberry along with Blackberry Internet Service & Mobile Telecommunication Service in such a manner that if a user surrenders one product, for example mobile telecommunication service, he is denied of the internet service. Moreover, the undertaking refused to activate Blackberry internet and telecommunication service on Blackberry handsets that were not purchased from it. Such tie-in arrangement, prima facie, constitutes unreasonably restrictive trade practice as defined under sub-clause (ii) of clause (b) and clause (c) of sub-section (1) of Section 6 of the MRTPO, 1970

ORDER:

The Commission found that the practice of sim-locking was an unreasonably restrictive trade practice that was in violation of section 6(1)(c) of the MRTO and otherwise has the effect of unreasonably preventing, restraining and lessening competition. The matter was disposed of vide Order dated 25-07-2008. The undertaking was directed to:

a) Make full disclosure and inform all its customers regarding the SIM lock feature. Importantly, all advertisement and promotional sales material with respect to BlackBerry handsets will in future carry a boldly displayed clear statement that the sales of these handsets are linked/tied with the BlackBerry service and Mobilink GSM Mobile telecommunication service;

b) disclose the amount of subsidy, in each sale and a reasonable time period not exceeding one year determined

c) on the basis of a pre-established formula on expiry of which the subsidy would be deemed recovered;

d) inform the customers how the subsidy could restrict the customers ability to unlock the SIM lock feature;

e) provide an unlocking procedure that must be convenient to the customer (e.g. not involving return of handset to a manufacturer);

f) make the SIM locking time bound for the customer, keeping in view, international best practices but not exceeding the time period determine as per (b) above; and

g) provide the option to switch over to another service provider upon payment of a specified, reasonable fee if the customer wants to switch prior to the expiry of the term.

Mobilink GSM was directed to convey/instruct RIM to implement the SIM locking in the above terms. However no penalty was imposed on the undertakings.

• The action was initiated under the provisions of Monopolies and Restrictive Trade Practices (Control & Prevention) Ordinance, 1970 (MRTPO, 1970) by the defunct Monopoly Control Authority (MCA). However when the MRTPO, 1970 was repealed the order was passed by the Competition Commission Of Pakistan as the successor MCA under Section 59 of the Competition Ordinance, 2007.

CURRENT STATUS:

Compliance