Background of the Case:

The Competition Commission of Pakistan (“CCP”) received concerns by a resident of the society in question, alleging that they were being forced to subscribe to the sole cable television network provider i.e. MC Networks and were deprived of an alternative choice. The primary issue in the matter was to deduce whether the Society and the Network provider had entered into agreements for the provision of cable TV services to the residents of Phase-I of the Society, which has the object or effect of preventing, restricting or reducing competition with in the relevant market.

The Enquiry Report concluded that by virtue of the agreement signed between the Society and the network provider, a barrier to entry has been established as no other network provider is allowed to provide services within the jurisdiction of the society and the agreement grants exclusivity to the network provider, subsequently, the residents of the society are forced to subscribe solely to MC Networks for their network services. Furthermore, it was held that the agreement amounts to imposing restrictive trading conditions and limiting technical development and investment, therefore the agreement tantamount to a prima facie violation of Section-4 of the Competition Act, 2010.

Issues:

I. Whether the Society is an Undertaking within the meaning of Section 2(1) (q) of the Act? And

II. What is the relevant market for the purpose of these proceeding and in terms of Section 2 (1) (K) of the Act?

III. Whether the exclusivity granted to MC Networks by the Society for the provisions of cable TV services has the object or effect of preventing, restricting or reducing competition in the relevant market in contravention of Section 4 of the Act?

Order:

The Learned Bench held that in the instant matter contravention of Section 4(2) (a), 4(2) (b) and 4(2) (d) read with Section 4(1) has occurred. The Bench appreciated the compliant-oriented approach of the Undertakings and levied a fine of Rs. 1,000,000 on the Society, moreover, the Society was warned of severe consequences should any such behavior come to light in the future.

Current Status’s:

In the instant matter, following the Commission’s order, the Undertaking filed an appeal before the Competition Appellate tribunal wherein a suspension in respect to the instant order was granted.