A three member bench of the Competition Commission of Pakistan (CCP) issued its order in the matter of cartelization by Pakistan Ship’s Agents Association (PSAA), holding that PSAA had violated Section 4 of the Competition Act, 2010 by recommending a range of charges for ancillary shipping services provided by its members. The bench comprised of Mr. Abdul Ghaffar, Member (C&TA), Dr. Joseph Wilson, Member (MA&IA) and Mr. Mueen Batlay, Member (CP&R). The Commission while taking into account the governmental pressure on PSAA to regulate prices, the latter’s cooperation during the proceedings and its assurance/commitment to support the competitive regime in Pakistan, took a lenient view and has imposed a penalty in sum of PKR 1 million for the violation. PSAA has further been directed to pass a resolution affirming its adherence to the competition laws. The trade association has been directed to submit a written compliance report in 30 days. Earlier, an inquiry report on the matter, prepared by Ms. Shaista Bano, Director (C&TA) and Syed Umair Javed, Deputy Director (C&TA), had found that PSAA, by recommending a range of charges to levy on ancillary shipping services to its members had prima facie violated Section 4 of the Competition Act, which prohibits trade associations from fixing or recommending prices to its members. Evidence in this regard was gathered from an inspection of PSAA’s premises in Karachi carried out by CCP’s authorized officers in January this year. Prior to passing the order, PSAA was provided an opportunity of a hearing on 25 March 2011. In its arguments before the bench, PSAA contended that it was constantly pressurized by the government to regulate prices and expressed its desire to conform to the competition laws of the land and asked CCP for guidance on future conduct. PSAA, in its written arguments, offered to pass a resolution affirming its commitment to adhere to the Act and to refrain from taking any decision in violation of the latter. The Bench, while passing its order, appreciated PSAA’s approach and, despite rejecting governmental pressure as a state action defense, took the mitigating factors into consideration while imposing the fine under Section 38 of the Act. It would be pertinent to mention here that CCP is striving to create an atmosphere of competition law compliance by business undertakings without compromising on law enforcement. Due to CCP’s efforts, trade associations have begun to understand the need for complying with the Competition Act, 2010 and it is expected that this trend will grow in coming times.
A three member bench of the Competition Commission of Pakistan (CCP) issued its order in the matter of cartelization by Pakistan Ship’s Agents Association (PSAA), holding that PSAA had violated Section 4 of the Competition Act, 2010 by recommending a range of charges for ancillary shipping services provided by its members.
The bench comprised of Mr. Abdul Ghaffar, Member (C&TA), Dr. Joseph Wilson, Member (MA&IA) and Mr. Mueen Batlay, Member (CP&R).
The Commission while taking into account the governmental pressure on PSAA to regulate prices, the latter’s cooperation during the proceedings and its assurance/commitment to support the competitive regime in Pakistan, took a lenient view and has imposed a penalty in sum of PKR 1 million for the violation. PSAA has further been directed to pass a resolution affirming its adherence to the competition laws. The trade association has been directed to submit a written compliance report in 30 days.
Earlier, an inquiry report on the matter, prepared by Ms. Shaista Bano, Director (C&TA) and Syed Umair Javed, Deputy Director (C&TA), had found that PSAA, by recommending a range of charges to levy on ancillary shipping services to its members had prima facie violated Section 4 of the Competition Act, which prohibits trade associations from fixing or recommending prices to its members. Evidence in this regard was gathered from an inspection of PSAA’s premises in Karachi carried out by CCP’s authorized officers in January this year. Prior to passing the order, PSAA was provided an opportunity of a hearing on 25 March 2011. In its arguments before the bench, PSAA contended that it was constantly pressurized by the government to regulate prices and expressed its desire to conform to the competition laws of the land and asked CCP for guidance on future conduct. PSAA, in its written arguments, offered to pass a resolution affirming its commitment to adhere to the Act and to refrain from taking any decision in violation of the latter. The Bench, while passing its order, appreciated PSAA’s approach and, despite rejecting governmental pressure as a state action defense, took the mitigating factors into consideration while imposing the fine under Section 38 of the Act. It would be pertinent to mention here that CCP is striving to create an atmosphere of competition law compliance by business undertakings without compromising on law enforcement. Due to CCP’s efforts, trade associations have begun to understand the need for complying with the Competition Act, 2010 and it is expected that this trend will grow in coming times.
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