559 CCP cases involving over Rs67bn pending in courts

ISLAMABAD: Around 559 cases of the Competition Commission of Pakistan (CCP) are pending before various courts with stuck-up amount of over Rs67 billion.

Top official sources said that an increased number of cases in the judicial process and delay in timely resolution of cases is resulting in higher prices of several essential commodities, adding that cartels think that they could dodge the system by different tactics.

The Special Investment Facilitation Council (SIFC) has taken action to clamp down on speculative forex trading and combat smuggling of petroleum products and sugar. These actions have effectively driven down commodity prices and led to the appreciation of Pakistani Rupee.Under the Constitution, the CCP has the mandate of curbing cartels and mafias. The CCP has taken decisive actions in sectors such as sugar, wheat, cement, poultry, automobile, cooking oil and ghee, agriculture, oil and gas, ports and shipping, power, insurance, steel and aviation.

The CCP has imposed Rs6.3 billion on the cement sector, more than Rs11 billion on the telecom sector, Rs1 billion on electronic goods sector, Rs140 million on the automobile sector, Rs300 million on insurance sector, Rs75 million on flour mills associations and Rs44 billion on the sugar sector. Total penalties imposed by the CCP amount to approximately Rs68 billion.

Presently, there is a total of 559 cases pending in various courts. Among these, 170 cases are pending in the Supreme Court, where the constitutionality of the Competition Act 2010 has been challenged. Additionally, 210 cases await resolution in the Competition Appellate Tribunal, which is dysfunctional due to lack of appointment of Chairman Appellate Tribunal.

Due to the absence of Competition Appellate Tribunal chairman, the CCP is being bombarded with writ petitions in high courts.

The stay or restraining orders against the CCP for a long period are also directly connected with higher prices. The vested interests abuse the court process at the expense of the public.

In the sugar sector, the CCP initiated an investigation in 2020 and discovered that members of the Pakistan Sugar Mills Association (PSMA) collectively took commercially sensitive decisions. Such decisions included reducing domestic sugar stocks, which led to the increase or stabilisation of desired sugar price levels. In its 2021 Order, the CCP imposed a penalty of Rs44 billion on the PSMA and its members. Presently, this case remains pending in the Supreme Court, the high courts of Lahore and Sindh, and the Competition Appellate Tribunal.

Moreover, in 2019, the CCP found the Pakistan Flour Mills Association (PFMA) of violating the law and imposed a fine of Rs75 million. The PFMA had been found guilty of fixing flour prices, facilitating the exchange of commercially sensitive information, and manipulating the quantities of wheat-flour production. The case is pending in the Competition Appellate Tribunal.

In 2022, CCP imposed a fine of Rs1.1 billion on two home appliances firms for engaging in resale price maintenance (RPM) agreements with their dealers. Through these arrangements, they restricted their dealers from offering discounts to consumers. The case is currently pending in the Competition Appellate Tribunal.

Similarly, in 2015, the CCP imposed a fine of Rs140 million on the Pakistan Automobile Manufacturers Authorised Dealers Association. This penalty was levied after the CCP discovered that the association had been overcharging consumers by artificially fixing prices for their products and services. The case is pending in the Lahore High Court.

In 2013, CCP had dismantled a cartel that had been manipulating the prices of incoming international calls. In its ruling, the CCP nullified the International Clearing House (ICH) Agreement among 14 LDI (long distance and international) operators. Subsequently, the CCP imposed substantial penalties. The case is pending in both the Competition Appellate Tribunal and Sindh High Court.