BACKGROUND:

Pursuant to a price pattern examination of the polyester staple fibre in the market, the Monopoly Control Authority observed that there seemed to be unity among the undertakings as they were quoting /charging one price all over Pakistan. The almost identical price quoted by the undertakings in the daily Business Recorder, prima facie, indicated cartel like behavior amongst the undertakings.

The MCA initiated suo moto enquiry against Dewan Salman Fiber Ltd, Pakistan Synthetics Ltd, ICI Pakistan Ltd, Rupali Polyester Ltd and Ibrahim Fibers Ltd. Through letters dated 29-12-2006, the MCA asked the said undertakings for various production related information.

Thereafter, following the promulgation of the Competition Ordinance, 2007, the Competition Commission of Pakistan, as the succeeding anti-trust regulator, fixed the matter for hearing. The undertakings, inter alia, contended that merely having the same price does not amount to collusion or cartel like behavior. In response, the Commission, while referring to various rulings, agreed that conscious parallelism is not in itself sufficient to lead to or permit an inference that a price fixing agreement or cartel exists. However, it provided that once conscious parallelism is supplemented with plus factors evidence, inter alia, that i) the undertakings acted contrary to their economic interests, and ii) they were motivated to enter into a price fixing conspiracy, it can (in the absence of convincing material to the contrary presented by the undertakings) legitimately be inferred that a prohibited agreement is in place.

ORDER:

The Commission identified various plus factors and also found that the undertakings failed to provide anything cogent to the contrary. Given the indirect nature of the evidence against the undertakings, the Commission took a lenient view and the matter was disposed of vide Order dated 10-06-2008 after obtaining an undertaking/assurance by the undertakings, inter alia, affirming that they have not organized themselves to coordinate, adopt or fix parallel pricing or levels of output.

• 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 However when the MRTPO, 1970 was repealed the order was passed by the Competition Commission Of Pakistan as the successor MCA under Section 59 of the Competition Ordinance, 2007.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 by the undertakings