Violation of competition act: CCP issues show cause notice to company

ISLAMABAD: The Competition Commission of Pakistan (CCP) has issued show cause notices to a paint company and its dealers for entering a cartel agreement in violation of Section 4 of the Competition Act, 2010.

The CCP took notice of the allegations that the company and its dealers in Multan had agreed on fixing the rates of its products by an “agreement for retail and wholesale rate fixing.” As part of its enquiry, the CCP also conducted a search and inspection of the company premises in Lahore and Multan and impounded relevant documents and records.

The enquiry found that the company appeared to have entered into an agreement with dealers imposing an obligation of “Minimum Resale Price Maintenance (RPM)” on them for the sale of its products. This agreement introduced a restrictive trading condition that appeared to facilitate a downstream cartel with the object or effect of restricting competition in the relevant market. On the recommendation of the enquiry report, the CCP has issued show cause notices to the company and its 10 dealers for prima facie violating Section 4 of the Competition Act, 2010.