Background of the Case:

The residents DHA Phase 5 Lahore complained to the Commission that Wateen Telecom was bundling its “Analogue Television Service” with the “Digital Television and Internet Services.” Resultantly, in the absence of any other cable television service provider in the area, Wateen was allegedly abusing its dominant position by tying various products. The Enquiry report found that in the relevant market for the provision of Hybrid Fibre Coaxial (HFC)-based analogue television service in Phase V of DHA Lahore, WATEEN had prima facie abused its dominant position by tying its different products in violation of Section 3 of the Competition Act 2010. Subsequently, Show-Cause notices were issued to the parties involved.

Issues:

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

II. Whether the Undertaking holds a dominant position in the relevant market in terms of Section 2(l) (e) of the Act?

III. Whether the Undertaking has abused its dominant position in the relevant market in violation of Section 3(1), Section 3(2) read with Section 3(3)(c) of the Act;

Foreign Judgments relied upon by the Counsels:

1. Commission Decision, Case COMP/M.2876, 2 April 2003, Newscorp/Telepiu

2. Interest of Justice in Case 27 /76 United Brands v Commission {1978/ ECR 207

3. Case T- 201/04 v Commission [2007] ECR II 3601, para. 859

Order:

The Bench noted that television broadcasting sector is under a transition from analogue to digital services based on the directions of sector regulator, i.e. Pakistan Electronic Media Regulatory Authority (PEMRA). As per the settled jurisprudence in EU, since the analogue and digital TV services cannot be sub segmented into two separate product markets, hence the question of a tie-in of substitutable services with the same relevant market does not arise.

The order stated that the Enquiry Report has erred in establishing the relevant product and geographic market in this matter. The relevant market within Phases I to V of DHA is that of “Pay TV services” wherein various players including PTCL, Worldcall and Optix are competing, hence no market is foreclosed and accordingly, no case for abuse of dominance is established. Moreover, the dominance of Wateen due to its 100% market share is untenable due to a mistaken demarcation of the relevant market and lack of information on record to support the same.

Hence, the Bench set aside and disposed of the Show Cause Notice issued to Wateen.

Current Status:

In the instant matter, following the Commission order, the Undertaking filed writ petition before the honourable Islamabad High Court, pursuant to which a suspension order was granted in the instant matter and the case was subsequently transferred to the Competition Appellate tribunal.