The Competition Commission of Pakistan (CCP) has fixed 7 June 2010 as the date of hearing in the show cause notice issued to M/s Tetra Pak Pakistan Limited (the ‘Tetra Pak’) for allegedly abusing its dominant position in Pakistan. In discharge of its duties, CCP took notice of the letter dated 22 January 2009 of the Consumer Awareness and Welfare Association (CAAWA), wherein it was alleged that M/s Tetra Pak Pakistan Limited (the ‘Tetra Pak’) was abusing its dominant position in Pakistan. CCP conducted a detailed enquiry under Section 37 of the Ordinance by appointing Mr. Ikram Ul Haque Qureshi, Director General (Legal) and Mr. Noman A. Farooqi, Deputy Director (Legal), which was concluded vide enquiry report dated 19 May 2010. Based upon the recommendations of the Enquiry Officers in the Enquiry Report, a show cause notice was issued to Tetra Pak on 24 May 2010 under Section 30 of the Ordinance for the alleged abuse of its dominant position in the relevant market for the sale and lease of aseptic packaging machines using aseptic cartons, in terms of Section 3 of the Ordinance. It has been alleged in the show cause notice that in terms of the Enquiry Report, prima facie, Tetra Pak is abusing its dominant position, through the Trade Compliance clause in the ‘Equipment Sale Agreement’, which is not only unfair in nature but is also in violation of the basic principle ‘ignorance of law is no excuse’. It is further alleged in the show cause notice that, in terms of the Enquiry Report, Tetra Pak through its ‘Machine Rental Agreement’ is tying the lease of its Rented Equipment with the machine maintenance/ service agreement, and making it incumbent on its customers i.e. milk/juice processors to enter into a separate service (maintenance) agreement in order to conclude the machine rental agreement. This results in foreclosing the choice of its customers and thereby restricting competition for such services in the relevant market which is prima facie, violative of the provisions of 3(3)(c) & (d) of the Ordinance. It has been further alleged that, in terms of the Enquiry Report, prima facie, Tetra Pak is tying and imposing on its customers the sale of packaging machine with packaging material (aseptic cartons) in its ‘Agreement for the Installation and Commission’ during Commissioning and Validation period. Prima facie, this tied selling seems to have been imposed on its customers, in violation of Section 3(3) (c) of the Ordinance. In addition to the above, it has also been alleged in the show cause notice that, Tetra Pak did not provided copies of all the agreements entered inter se Tetra Pak and its customers i.e. milk/juice processors. Such withholding of information on part of Tetra Pak, prima facie is in violation of clause (c) of sub-section (1) of Section 38 of the Ordinance Tetra Pak has been called upon to show cause in writing on or before 7 June, 2010 and to appear and avail the opportunity of hearing before the Commission on 7 June, 2010 and explain as to why an appropriate order under Section 32 and/or clause (a) of Section 31 of the Ordinance may not be passed and/or penalty for the abovementioned violations be not imposed under Section 38 of the Ordinance.
© CCP 2024, Competition Commission of Pakistan ©All rights reserved
