Background of the case:

The Commission received complaints and concerns from the residents of DHA-I Islamabad, stating that had been deprived of an alternate choice of CIT services provider, which was restricted to only two operators, i.e. Pakistan Telecommunication Company Limited (PTCL) and DHAI Teleman. They alleged that DHA was not letting Nayatel to operate in the area despite the company’s interest to provide its services. The Right of Way (ROW) is a platform for internet service providers for the provision of CIT services. According to complaints, DHA management had given ROW to PTCL and DHAI Teleman in DHA-1 while denying the same to Nayatel on equal terms and conditions. Accordingly, Nayatel was approached by the Commission to inform the Commission in respect to their experience upon approaching DHA-I for the provision of their services in the area. Nayatel alleged that DHA’s management had created a barrier to entry for Nayatel by offering dissimilar conditions and demanding a higher price of ROW than the already existing internet service providers.

Considering the aforementioned scenario an enquiry was initiated to probe into the matter, the enquiry concluded that DHA management, prima facie, abused its position in violation of Section 3 of the Competition Act, 2010 by not allowing Nayatel to operate in the relevant market and recommended to initiate proceedings against DHA under Section 30 of the Act.

Issues:

1) Whether the Commission has jurisdiction to take cognizance of the alleged conduct?

2) Whether DHA-1 has abused its dominant position in terms of Section 3 of the Act?

Foreign Judgment:

a) Sea Containers v. Stena Sealink, (1994) OJ L 15/18

b) IV/34.801 FAG – Flughafen Frankfurt/Main AG, (1998) OJ L 72/30

Order:

The Commission in the instant order held that DHA-I held a dominant position in the relevant market and had already granted ROW to four parties i.e. PTCL, Trans world, Wateen and its very own subsidiary DHAI Teleman for providing (G-PON) and allied CIT service to the residents of DHA-I, the licensee seeking the ROW was Nayatel. The already existing service providers are on cost sharing basis with DHA-I rather than on a revenue sharing basis. The order observed that DHA-I has failed to explain any logic as to why there has been a disparity between the charges offered to Nayatel and other incumbents, which amounts to discrimination and application of dissimilar conditions to the same transaction, under Section 3 (1), read with subsection 3(e) of the Act. Keeping in view the circumstances of the instant matter DHA-I was directed to correct its behavior and to offer Nayatel within 90 days from the date of the order to use the ROW on terms and conditions no less favorable than the incumbent service providers. The order has not imposed any penalty on DHA for now. But in case of non-compliance, DHA-I shall be liable to pay PKR 2 Million for violating Section 3 of the Competition Act, 2010 in addition to appropriate penalties for non-compliance under Section 38 of the Act. DHA-I has been further directed to file a compliance report before the Registrar of the Commission no later than 7 (seven) days from the date such offer is made to Nayatel.