CCP bills Rs 12.9bn to cartels

Salim Mandviwala

Saturday, December 15, 2012

ISLAMABAD – Minister of State for Finance Salim Mandviwala told senate that the Competition Commission of Pakistan (CCP) had undertaken punitive actions against cartelization in the country.

Responding to a supplementary question by Col. (retd) Tahir Hussain Mashhadi, Mandiwala said that a fine of Rs 6.5 billion had been imposed on Cement Manufacturers Association for hiking prices of cement without any valid economic reason or necessity. Mandiwala added, “Likewise, the CCP imposed a fine of Rs 6.3 billion against Jute Mills Association while Rs 50 million had been imposed on Ghee (edible oil) Mills Association for increasing prices of the commodities without any rational. Moreover, a fine of Rs 50 million had been imposed on ATM machines body for fleecing the consumers and following the fine, different banks had decided to reduce rates being charged to consumers.” He told that CCP had also imposed a fine on the Poultry Association of Pakistan.

Mandiwala underscored that the CCP would go to any length to ensure a level playing field for competing economic interests, to enhance economic efficiency and to safeguard consumers from exploitation. He said that “under the provisions of Section 4 of the Competition Act, CCP as part of its statutory obligation may investigate and penalize the undertakings for entering into prohibiting agreements (cartelization) which have the object or effect of preventing, restricting or reducing competition within the relevant market and restrict free trading and competition between business entities”.

He said that under the said Act, CCP may act upon a receipt of complaint on its own and initiate an enquiry. The tools used by CCP to detect cartels are in line with international best practices and include search and inspection (Section 34), leniency (Section 39) and reward payment schemes. Mandiwala emphasised that “the CCP conducts detailed enquiries at the initial stages and if the enquiry is concluded with the prima facie findings that there exists a cartel, the CCP accordingly proceeds under Section 30 by issuing show-cause notice and granting the undertaking concerned an opportunity of hearing. If any violation is established during the hearing, then CCP is empowered under Section 31(b) to pass an Order annulling the agreement or placing any other requirement on the undertaking concerned”.

The CCP can also impose a penalty not exceeding Rs 75 million or an amount not exceeding ten 10 percent of the annual turnover of the undertaking.

Following are the undertakings of CCP to prevent cartelization:

1. CCP has so far taken action against 298 entities for cartelization/prohibited Agreements in sectors that are of consequence to ordinary people and against persons with power and influence.
2. CCP in discharge of its statutory role under Section 29 has issued 11 Policy Notes so far regarding any policy or law which is in conflict with the Act.
3. CCP has launched Reward Payment to Informants Scheme.
4. An advocacy booklet under the title Information Booklet on Protection from Anti-competitive Practices has been printed and disseminated.
5. CCP has developed research capacity and published researched publications in order to study the state of competition in the sectors and act accordingly.
6. CCP has established an online complaint cell for facilitation of general public.
7. CCP has build a coalition of support by reaching out aggressively to the media, consumer associations, professional bodies, chambers of commerce, sectoral business associations, think tanks etc.
8. As a part of advocacy initiative for consumer awareness, CCP has also issued press releases of its actions, media interviews and get the articles published in the news papers. The aim is again creating awareness amongst the consumers for their rights under the Act.

Courtesy: pakistantoday

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