The 17th quarterly meeting of the Competition Consultative Group (CCG), an informal think tank set up by the Commission to solicit feedback and suggestions on competition related matters from the business community, legal community, academia, media, regulatory bodies and the government, was held in Karachi. The meeting was chaired by the Chairperson, CCP, Rahat Kaunain Hassan, and attended by Abdul Ghaffar, Member Cartels & Trade Abuses, Dr. Joseph Wilson, Member Mergers & Acquisitions and International Affairs, Dr. Shahzad Ansar, Member Office of Fair Trade & Budgetary Affairs, and Mueen Batlay, Member Competition Policy & Research. The participants of the CCG meeting included senior representatives of Civil Aviation Authority, Securities & Exchange Commission of Pakistan (SECP), State Bank of Pakistan (SBP), Faysal Bank, Overseas Investors Chamber of Commerce & Industry (OICCI), Engro Polymer & Chemicals Pvt. Ltd., ICI Pakistan Limited, Pakistan Business Council, Federation of Pakistan Chamber of Commerce & Industry (FPCCI), Consumer Forum, Consumer Association of Pakistan, Karachi School of Business & Leadership, Ernst & Young Ford Rhodes Sidat Hyder, daily Business Recorder, Linde Pakistan Ltd., JS Private Equity, Lotte Pak PTA, Institute of Chartered Accountants of Pakistan, and Taxation & Company Law Consultants. The Chairperson and Members of CCP briefed CCG members on the recent enforcement actions, initiatives in advocacy and the upcoming 3rd international conference of the Commission. The Chairperson while addressing the meeting said that enforcement remains top priority of the Commission and thus some crucial enforcement actions have been taken recently. She said that the order had been issued by the Commission relating to the Institute of Chartered Accountants of Pakistan (ICAP) in January 2013, in which the Commission imposed PKR 25 million fine on ICAP for putting a ban on the training of non-ICAP accountancy students by its approved training organizations. The Commission declared ICAP’s prohibition to be in contravention of Section 4 of the Competition Act, 2010 and restrained it from issuing similar directives in the future. The CCG members were informed that the directive issued by ICAP in July 2012 in this regard also acted as an entry barrier for the market for accountancy services, which are considered crucial to the business community and the economy as a whole. She further elaborated that after the Commission's order, there is no further need for ICAP to withdraw the Directive to enable accounting firms to train non-ICAP students since the same has been declared to be without any legal effect by the Commission. The Chairperson further informed CCG members that the Commission had issued a Policy Note to Federal Board of Revenue and National Tariff Commission recommending rationalization and slash down of tariff structure of Poly Ethylene Terepthalate (PET) Resins to eliminate discrimination, particularly in respect of PET Film Grade, PET Bottle Grade and PET Yarn Grade. CCP took notice of concerns raised on classification of PET Resins under Pakistan customs Tariff Code (PCT Code) and customs duty levied on them under Notifications SRO 507(I)/2007 and SRO 687(I)/2010 which, prima facie, gave undue duty protection to the sole local manufacturer/supplier of PET Resins. The sole manufacturer of PET Resin is a vertically integrated unit having also presence in downstream market. The Policy Note examined whether resultant custom duty structure on PET Resin and its downstream products placed the competitors of the sole manufacturer of PET Resin at a competitive disadvantage. The CCG members were further informed that being a vigilant competition watchdog, the Commission as part of its enquiry conducted search and inspection of All Pakistan CNG Association in Islamabad, CNG Dealers Association, and CNG Station Owners Association in Karachi in December 2012 to see whether any CNG associations or its members were engaged in anti-competitive practices. Furthermore, CCP needed to verify whether the boycott was an individual decision of member undertakings or a collective withdrawal of services through associations to get their demands fulfilled; leading to the suspension of services from CNG stations. Closure of these stations has been witnessed across the country causing immense hardship to consumer. The participants were informed that the enquiry committee of the Commission has also been entrusted to review the policy framework in the CNG sector in order to identify policy distortions (if any) that are preventing, restricting or reducing competition in the market. The Chairperson informed the meeting that the enquiry committee will soon put up its report to the Commission. The CCG meeting was also informed that the Commission’s Office of Fair Trade (OFT) was actively dealing with cases pertaining to deceptive marketing. In a recent case of deceptive marketing, the Commission imposed a penalty of PKR 4.5 Million on five local courier service providers for violating Section 10 of the Competition Act. The Commission had received a complaint against seven courier service providers from DHL Pakistan (Pvt.) Limited for using its trademark without authorization. An enquiry conducted by CCP established that the trademark of DHL was fraudulently being used by the accused courier service providers. The CCP Bench after hearing the parties at length and analyzing the documents placed on the record concluded that the alleged conduct of the Respondents was aimed at capitalizing on the goodwill attached to DHL trademark. Out of seven, two courier service providers were forthcoming and discontinued using the DHL trademark during the proceedings, therefore, the Commission while taking a lenient view did not impose penalty on them. While briefing the CCG members on the advocacy initiatives of the Commission, the Chairperson informed that the 3rd International Conference was being organized with the collaboration of European Union – Delegation to Pakistan, in the second quarter of 2013. The title of the 2-day conference will be, “Role of Competition in Fostering Trade and Investment in Pakistan” and it will have four technical sessions on, “Nexus between Competition Regime and Trade and Investment”; Public Procurement: Creating a Level-playing Field”; “Detecting Cartels: Investigative Techniques, Leniency and Reward Programs”; and “Promoting Competition through Advocacy”. The CCG members were also briefed by CCP Member Dr. Joseph Wilson on a key advocacy initiative of the Commission for introducing competition law as an elective subject in universities. It was emphasized that the introduction of an academic course regarding competition law at premier academic institutions will further create awareness, and ignite interest, in this field of law which has assumed increasing importance in economic regulation. The CCG members appreciated the performance of the Commission and stated that effectiveness of the Commission’s actions was being widely felt. Due to its effective advocacy approach, the Commission was not an unknown entity anymore. The CCG members emphasized that the government needs to support the Commission by strengthening the institution and play its role in resolving the pending issues, most importantly, the issue of funding to the Commission.
The 17th quarterly meeting of the Competition Consultative Group (CCG), an informal think tank set up by the Commission to solicit feedback and suggestions on competition related matters from the business community, legal community, academia, media, regulatory bodies and the government, was held in Karachi. The meeting was chaired by the Chairperson, CCP, Rahat Kaunain Hassan, and attended by Abdul Ghaffar, Member Cartels & Trade Abuses, Dr. Joseph Wilson, Member Mergers & Acquisitions and International Affairs, Dr. Shahzad Ansar, Member Office of Fair Trade & Budgetary Affairs, and Mueen Batlay, Member Competition Policy & Research. The participants of the CCG meeting included senior representatives of Civil Aviation Authority, Securities & Exchange Commission of Pakistan (SECP), State Bank of Pakistan (SBP), Faysal Bank, Overseas Investors Chamber of Commerce & Industry (OICCI), Engro Polymer & Chemicals Pvt. Ltd., ICI Pakistan Limited, Pakistan Business Council, Federation of Pakistan Chamber of Commerce & Industry (FPCCI), Consumer Forum, Consumer Association of Pakistan, Karachi School of Business & Leadership, Ernst & Young Ford Rhodes Sidat Hyder, daily Business Recorder, Linde Pakistan Ltd., JS Private Equity, Lotte Pak PTA, Institute of Chartered Accountants of Pakistan, and Taxation & Company Law Consultants.
The Chairperson and Members of CCP briefed CCG members on the recent enforcement actions, initiatives in advocacy and the upcoming 3rd international conference of the Commission.
The Chairperson while addressing the meeting said that enforcement remains top priority of the Commission and thus some crucial enforcement actions have been taken recently. She said that the order had been issued by the Commission relating to the Institute of Chartered Accountants of Pakistan (ICAP) in January 2013, in which the Commission imposed PKR 25 million fine on ICAP for putting a ban on the training of non-ICAP accountancy students by its approved training organizations. The Commission declared ICAP’s prohibition to be in contravention of Section 4 of the Competition Act, 2010 and restrained it from issuing similar directives in the future. The CCG members were informed that the directive issued by ICAP in July 2012 in this regard also acted as an entry barrier for the market for accountancy services, which are considered crucial to the business community and the economy as a whole. She further elaborated that after the Commission's order, there is no further need for ICAP to withdraw the Directive to enable accounting firms to train non-ICAP students since the same has been declared to be without any legal effect by the Commission.
The Chairperson further informed CCG members that the Commission had issued a Policy Note to Federal Board of Revenue and National Tariff Commission recommending rationalization and slash down of tariff structure of Poly Ethylene Terepthalate (PET) Resins to eliminate discrimination, particularly in respect of PET Film Grade, PET Bottle Grade and PET Yarn Grade. CCP took notice of concerns raised on classification of PET Resins under Pakistan customs Tariff Code (PCT Code) and customs duty levied on them under Notifications SRO 507(I)/2007 and SRO 687(I)/2010 which, prima facie, gave undue duty protection to the sole local manufacturer/supplier of PET Resins. The sole manufacturer of PET Resin is a vertically integrated unit having also presence in downstream market. The Policy Note examined whether resultant custom duty structure on PET Resin and its downstream products placed the competitors of the sole manufacturer of PET Resin at a competitive disadvantage.
The CCG members were further informed that being a vigilant competition watchdog, the Commission as part of its enquiry conducted search and inspection of All Pakistan CNG Association in Islamabad, CNG Dealers Association, and CNG Station Owners Association in Karachi in December 2012 to see whether any CNG associations or its members were engaged in anti-competitive practices. Furthermore, CCP needed to verify whether the boycott was an individual decision of member undertakings or a collective withdrawal of services through associations to get their demands fulfilled; leading to the suspension of services from CNG stations. Closure of these stations has been witnessed across the country causing immense hardship to consumer. The participants were informed that the enquiry committee of the Commission has also been entrusted to review the policy framework in the CNG sector in order to identify policy distortions (if any) that are preventing, restricting or reducing competition in the market. The Chairperson informed the meeting that the enquiry committee will soon put up its report to the Commission.
The CCG meeting was also informed that the Commission’s Office of Fair Trade (OFT) was actively dealing with cases pertaining to deceptive marketing. In a recent case of deceptive marketing, the Commission imposed a penalty of PKR 4.5 Million on five local courier service providers for violating Section 10 of the Competition Act. The Commission had received a complaint against seven courier service providers from DHL Pakistan (Pvt.) Limited for using its trademark without authorization. An enquiry conducted by CCP established that the trademark of DHL was fraudulently being used by the accused courier service providers. The CCP Bench after hearing the parties at length and analyzing the documents placed on the record concluded that the alleged conduct of the Respondents was aimed at capitalizing on the goodwill attached to DHL trademark. Out of seven, two courier service providers were forthcoming and discontinued using the DHL trademark during the proceedings, therefore, the Commission while taking a lenient view did not impose penalty on them.
While briefing the CCG members on the advocacy initiatives of the Commission, the Chairperson informed that the 3rd International Conference was being organized with the collaboration of European Union – Delegation to Pakistan, in the second quarter of 2013. The title of the 2-day conference will be, “Role of Competition in Fostering Trade and Investment in Pakistan” and it will have four technical sessions on, “Nexus between Competition Regime and Trade and Investment”; Public Procurement: Creating a Level-playing Field”; “Detecting Cartels: Investigative Techniques, Leniency and Reward Programs”; and “Promoting Competition through Advocacy”.
The CCG members were also briefed by CCP Member Dr. Joseph Wilson on a key advocacy initiative of the Commission for introducing competition law as an elective subject in universities. It was emphasized that the introduction of an academic course regarding competition law at premier academic institutions will further create awareness, and ignite interest, in this field of law which has assumed increasing importance in economic regulation.
The CCG members appreciated the performance of the Commission and stated that effectiveness of the Commission’s actions was being widely felt. Due to its effective advocacy approach, the Commission was not an unknown entity anymore. The CCG members emphasized that the government needs to support the Commission by strengthening the institution and play its role in resolving the pending issues, most importantly, the issue of funding to the Commission.
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