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September 22, 2015

CCP issues notice to eight elite schools on fees hike


September 22, 2015

ISLAMABAD: In order to probe cartelization of elite schools for hiking unjustified fee structure, the Competition Commission of Pakistan (CCP) on Monday issued notices to Chief Executive Officers (CEOs) and Board of Directors of 8 school chains, catering to elites children, for providing required information in seven days or be ready to face the music.
In the aftermath of refusal of elite schools to provide the required information to ascertain anti-competitive behavior owing to hike in fee structure without having any justified reasons, the CCP by showing its muscles issued order binding the CEOs and members of board of directors of 8 schools to share information till September 28, 2015 otherwise the Commission will proceed against them.
Top official sources confirmed that the CEOs and directors of private education institutes who were issued orders included the City School, Beaconhouse, Elementary Montessori School, Headstart School, Roots Millennium School, The Lahore ALMA, LACAS and Salamat School System. The institutes CEOs and their directors have been given a deadline until the 28th of September 2015 to supply the required information to the Commission, failing which the Commission will proceed as per law.
The Commission has been left with no other option but to issue order for CEOs and board of directors to personally ensure information sought by the CCP to conclude its ongoing inquiry to determine whether cartelization or abuse of dominance was used to hike their fees structure or it was just matter of routine.
“The findings of the inquiry will determine its fate and if the Commission decides to proceed against them then heavy penalty amounting to billions of rupees can be imposed,” said the sources.
Although, Prime Minister Nawaz Sharif had barred elite schools from increasing fees during this year but it would not stop the ongoing inquiry initiated by the CCP on complaints of parents.
The CCP has issued an order under

Section 36 of the Competition Act 2010, to the CEOs and directors of eight private education institutions for the provision of information required for assessing allegations of anti-competitive practices - such as unreasonable increase in school fees and tying of products and services.
The Commission is currently investigating allegations of potential anti-competitive behaviour by private education institutions across Pakistan. The Commission received more than 1000 complaints from all over the country.
Accordingly, around 123 schools in various parts of the country were asked to provide relevant information vis-à-vis their fee structures, student strengths, reasons for increasing fees and allied charges, etc.
Although many institutions responded with the requested information, others either did not or replied with incomplete and irrelevant information, despite repeated requests by the Commission.
As a consequence it was deemed necessary by the CCP to issue an order to such institutions under Section 36 of the Act. Section 36 empowers the Commission to issue a special or general order calling upon undertakings to furnish information that the Commission deems necessary or useful for discharging its functions as envisioned in the Act. Failure to provide the requisite information may make the CEOs and directors of these undertakings liable to strict penalties and other sanctions under Section 38 of the Act.

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