2022 PLP 1068 (CLD)

BACKGROUND FACTS

1. This order shall dispose of proceedings arising out of Show Cause Notice No. 56/2020 to Pakistan Sugar Mills Association (the 'PSMA') and Show Cause Notices Nos. 57/2020 to 140/2020 (collectively referred to as 'SCNs') to 84 sugar mills affiliated with PSMA (hereinafter collectively referred to as the 'undertakings') for prima facie violation of section 4 of the Competition Act, 2010 (hereinafter referred to as the 'Act').

2. Brief facts of the case are that the Competition Commission of Pakistan (the `Commission') initiated an enquiry on 19 December 2019 under section 37(1) of the Act in order to analyze "Possible anti-competitive activities in the Sugar Industry". Pursuant to that, an Enquiry Committee was constituted with approved Terms of Reference (the `ToRs') in terms of clauses (b) and (c) of subsection (1) of section 28 read with section 37 of the Act and to ascertain the state of competition in the sugar industry while taking into account various aspects which included, inter alia, the cost of production of sugar.

3. On 7 September 2020, the Commission was presented a working paper proposing amendments in the ToRs as new facts that had come to light pertaining to anti- competitive activities in the sugar sector, in particular, price hike, shortage of supply, collective suspension of crushing activities by sugar mills at the behest of PSMA and the non-supply to Utility Stores Corporation ('USC'). Consideration the same, the Commission resolved to add the following to the ToRs: i. Whether any industry players(s) is prima facie dominant in the terms of section 2(1)(e) of the Competition Act, 2010 ('the Act'). Assess individual as well as collective dominance as per the law. ii. Did major players in the Sugar Industry collectively decide to cease crushing of sugarcane during crushing season 2019-20, thereby affecting production of sugar in prima facie violations of section 4 (Prohibited Agreement/Cartelization) and or 3 (Abuse of Dominant Position) of the Act. iii. Whether there has been any collective decision by sugar mills for not supplying sugar to tenders floated by Utility Stores Corporation (USC) or any form of bid rigging in prima facie violation of section 4(2)(e) of the Act. iv.- Whether there is collusion behind recent price hike or current shortage/crisis. v. Any other anti-competitive conduct that may be identified during the course of the investigation.

4. On 10 September 2020, the Commission authorized a team of officers of the Commission under section 34 of the Act to 'enter and search' two premises occupied by the PSMA. On 14 September 2020, the 'enter and search' inspection was carried out at (i) Office No. 102, Mohammad Gulistan Khan House, Fazal-e-Haq Road, Blue Area, Islamabad; and (ii) Unit No. 2, Happy Homes, 38-A, Main Gulberg, Lahore. Keeping available facts in view, duly authorized officers of the Commission conducted another `enter and search' inspection at Messrs JDW Sugar Mills Limited (JDW Group's Sugar Division) on 25 September 2020.

5. During the said 'enter and search' inspections, authorized officers impounded certain evidentiary material comprising, inter alia, documents/files, computer and computer-stored data including smart phones. In terms of section 53 of the Act, the Commission sought assistance from the Federal Investigation Agency ('FIA') for a digital forensic analysis, which was provided by FIA on 25 September 2020 and 07 October 2020.

6. The Enquiry Committee finalized the Enquiry Report on 21 October 2020. It found that there was absence of any individual or collective dominant position in the relevant market. Therefore, a case of abuse of dominance in terms of section 3 of the Act was not made out. However, with regard to violation of section 4 of the Act, the Enquiry Committee found prima facie evidence of collusive/collective decision behind the sugar shortage crisis and price hike. The relevant para of the Enquiry Report is reproduced herein below: "

83. Based on the foregoing analysis, it appears that starting from 2012 to date, the conduct of PSMA and all its members vis-a-vis collective discussion on stock positions leading to a decision on the quantity to be exported is tantamount to fixing or setting/controlling supply within the relevant market this has resulted in price hike that is not based on actual/available supply and demand. Hence a prima facie violation of section 4(1) read with section 4(2)(c) of the Act. Furthermore, this reduction in domestic stocks/supplies leads to an increase in or maintenance at desired price level in the relevant market, as admitted by PSMA through evidence presented above, which constitutes a prima facie violation of section 4(2)(a) of the Act by PSMA members."

7. The Enquiry Report also found that there had existed zonal committees for coordination on local sales, stock positions and production quotas eventually leading to control of local sales. The relevant paragraph of the Enquiry Report is reproduced herein below: "

92. From the evidence presented above, it appears that since 2017 PSMA Punjab Zone has: a. Created zonal divisions for the purposes of coordination among respective mills on local sales as the phrase 'Sales committee comprising of one member from each zone to meet periodically' indicates. Share of each zone vs total production in Punjab is mapped out which shows that the coordination in sales is based on share in production. b. Stock positions of each mill in each zone are mapped out on a monthly basis. c. Mills are also coordinating for start of crushing activity in the respective zones. This zonal division and coordination on sales, stock positions and production quota appears to be none other than monitoring the position with respect to each mill to control local sales and quantity to be sold which is a prima facie violation of section 4(1) read with section 4(2)(a) of the Act."

8. In connection with the information exchange on stock positions, the Enquiry Report has found that: "

111. From the foregoing and the evidence available, it appears that since 2012 onwards, the platform of PSMA is being used by its member mills in Punjab Zone to share stock information amongst themselves which is considered as sensitive commercial information and such information having a direct bearing on the current and future price of sugar thereby used to control prices and restrict and distort competition in the relevant market in prima facie violation of section 4(1) read with section 4(2)(a) of the Act."

9. The Enquiry Committee also found that the decision to cease crushing in the season 2019-20 was prima facie the result of a collective decision on part of the sugar mills. Relevant portion of the Enquiry Report is reproduced herein below: "

137. From the evidence above, it appears that during the crushing season 2019-20, PSMA Punjab Zone ceased to crush sugar from 30th December 2019 to 11th January 2020. As evident from the data received from the Cane Commissioner Punjab, this closure was a collective decision on part of PSMA Punjab wherein 15 mills appear to have ceased crushing on the call of the association. Evidence impounded from PSMA indicates that during this period PSMA Punjab held back to back meetings with the agenda of sugarcane procurement. The purpose of holding these meetings appears none other than to coordinate on taking decision on crushing and procurement of sugar cane as merely procurement is a commercial decision and does not appear to hold relevance for collective deliberation using the association platform. Therefore, prima facie PSMA Punjab Zone particularly the 15 units named by the Cane Commissioner Punjab, are taking a collective decision on procurement in violation of section 4(1) read with section 4(2)(a) of the Act."

10. With regard to the USC tenders, the Enquiry Report found as follows: "

118. In terms of its dealings with USC following conclusions are drawn: a. For tender of 20,000 MT of sugar (closing date of which was 28th March 2019) it appears that mills of PSMA Punjab Zone took a collective decision to fix and divide the quantity of sale, among the members mills who participated in the tender, thus prima facie violating section 4(1) read with section 4(2)(c) of the Act. b. For tender dated March 20, 2010 for 100,000 tons of sugar, it appears that vide its letters, dated 26th and 29th March 2010, to USC, PSMA and its members have taken a collective decision on dividing and sharing quantity to be supplied which is a prima facie violation of section 4(1) read with section 4(2)(c) of the Act."

11. Based on the findings and recommendations of the Enquiry Committee, the Commission issued the SCNs to the undertakings. Availing the opportunity of hearing the undertakings made legal and factual arguments separately through different counsel. However, upon review and consideration of these arguments, the Commission considers several legal arguments similar and/or overlapping. Therefore, these are addressed in this order as 'Common Grounds'. However, factual grounds asserted by the undertakings are considered separately. A. COMMON GROUNDS

12. The common legal grounds/objections are as follows: i. The Enquiry Report is based on mere deductions and surmises. These do not satisfy the 'standard of proof. The undertakings maintain that the Commission should adopt the burden of proof, i.e., 'beyond reasonable doubt' instead of the `balance of probabilities' with regard to the probative value of the evidence available on record. ii. The undertakings objected to the constitutional vires, the legality and the validity of the Act on the grounds of lack of Federal Legislative competence, unconstitutional powers to enter and search premises, unavailability of judicial review over actions of the Commission and violation of fundamental rights. iii. As per section 24-A General Clauses Act, 1897, discretionary powers exercised by the Commission are subject to the test of reasonableness and fairness. The enquiry procedure is claimed to be unfair as no reason or basis is adduced qua reconstitution of the Enquiry Committee and amendments in ToRs after nine months of the initial constitution the Enquiry Committee. According to the undertakings, the initial ToRs were "to review state of competition in sugar industry", whereas, amendment in TORs added peripheral matters to the scope of the Enquiry and completely changed its nature. Failure of the Enquiry Committee to mention this fact or reason in the Enquiry Report demonstrates lack of fairness, transparency and bona fide on the part of the Commission. Hence, violating Articles 4 and 10-A of the Constitution of the Islamic Republic of Pakistan, 1973 (the "Constitution"). iv. Amendment in TORs, reconstitution of the Enquiry Committee and issuance of SCNs are not a result of any objective, independent and impartial decision of the Commission. Rather, the Federal Government dictated the Commission to conduct an unlawful roving enquiry. Strict deadlines from the Government caused the Commission to conclude the enquiry in a hasty and arbitrary manner. According to the undertakings, the Commission changed the Enquiry Committee and its ToRs pursuant to a letter of Advisor to Prime Minister as well as Action Matrix dated 21 May 2020 proposed by him. The said Action Matrix was held unlawful by the Sindh High Court and the Islamabad High Court, when certain sugar mills challenged it. However, the matter is still pending adjudication before the Supreme Court of Pakistan. Hence, neither initiation of the Enquiry pursuant to the letter of the Advisor to the Prime Minister is lawful nor there existed any "reasonable grounds" under section 34 of the Act to "enter and search" the premises. Furthermore, the undertakings had not been made aware of any legality or basis for the purported enter and search inspection; therefore, the Commission is put to strict proof of the same. Hence, due process and safeguards built in the Act have not been complied with. v. SCNs have been issued by the Registrar instead of the competent authority and no disclosure is attached with the SCNs for delegation of power under section 34 of the Act. vi. A view/opinion independent of the Enquiry Report should have been formed by the Commission and communicated before initiating proceedings under section 30 of the Act. The findings of the Enquiry Report are based on certain evidence which the undertakings have not been confronted with, therefore, it does not only prejudice the rights available to the undertakings under the principles of natural justice, but also, nullifies the whole proceedings in the eyes of the law. vii. No spill-over effect has been stated in the SCNs required by the judgment of the Lahore High Court dated 26 October 2020 in the matter of LPG Association. Issue of jurisdiction should have been decided at first instance. The Enquiry Report is silent as to how alleged conduct of the Respondent affected national trade and commerce. Therefore, the undertakings are not subject to the jurisdiction of the Commission. viii. The Commission has not complied with the test provided by the Islamabad High Court in the matter of National Feeds (2016 CLD 1688), which concerns the availability of sufficient material before initiation of enquiry. According to the undertakings, the Commission cannot proceed on the basis of insufficient facts or when allegations are not substantiated by prima facie evidence. Initiation of Enquiry for an alleged contravention of the provisions of Chapter II is claimed to be an adverse action for an undertaking, which not only has undermined the repute of a commercial entities in the market, but also, entailed inconvenience and intrusive proceedings. Besides, the undertaking claimed not to have received any copy of the underlying decision of the Commission. ix. The undertakings have resorted to the plea of 'Government Action'. Reliance is placed on Eastern Railroad v. Noerr Motor Freight [365 US 127 (1961)], wherein the alleged restraint upon trade was a result of valid governmental action, as opposed to private action, hence, no violation of competition law was made out. x. No opportunity of proper hearing was afforded to the undertakings at Enquiry stage or before taking any adverse action. Reliance is placed on Abdul Majeed Zafar v. Governor of Punjab, 2007 SCMR 330. xi. Documents and other materials impounded during the Enquiry are without lawful authorization, hence, cannot be used as evidence against the undertakings. xii. Relevant geographic market is incorrectly defined as "white refined sugar in the whole of Pakistan". Various factors such as commercial/domestic consumers, distinct cost structures and production procedures, different legal/regulatory frameworks and Government interventions are ignored. Sugar and sugarcane are provincial subjects, regulated by provincial laws and operate in different markets. Even otherwise, the Enquiry Report has defined relevant market in the context of section 3 instead of determining it in the context of section 4 of the Act. Whereas, it would be necessary in the light of the Honourable Lahore High Court's judgment in the case of LPG Association to ascertain the 'spill-over effect'. xiii. Data pertaining to sugar exports was unlawfully obtained by the Enquiry committee from the Federal Board of Revenue (FBR). Information obtained employed or utilized by the Enquiry Committee is also in violation of section 155H of Customs Act, 1969. The Enquiry Committee was not delegated power to seek information in such manner in accordance with the Competition Commission (Conduct of Business) Regulations, 2007. Therefore, actions of the Enquiry Committee are unlawful. xiv. The PSMA has a licensed mandate under the Trade Organization Ordinance, 2007 (now Trade Regulation Act, 2013), to share statistics pertaining to sugar industry and obtain any concessions, rights and privileges from the Government in the best interests of the sugar industry. Unless and until that license is set aside by a court of competent jurisdiction, the Commission would not be able to proceed in the matter. Objectives of PSMA enshrined in its Memorandum of Association ("MOA") allow, as per the law and its licensed mandate, PSMA to collect, compile and circulate statistics pertaining to the sugar industry. The context in which the Sugar Advisory Board ("SAB") requires the PSMA to attend its meetings and play its role is not appreciated by the Enquiry Committee. xv. On the basis of merely 8 month data, the Enquiry Report unfairly jumped to an incorrect conclusion that there has always been increase in price due to export. The undertakings claimed that there isn't any direct link between export of sugar and rise in its price. The statement that 'export always raises prices' is actually linked to retail price, not to the ex-mill price. If there was increase in ex-mill prices after export then it would have proved that the undertakings had obtained benefit from export and raised prices, however, such is not the case. xvi. Allegation qua 'collective discussion of stock position'; 'reduction in domestic stocks/supplies' and 'coordination on local sales' are unfounded. Data on sales, stock positions and production is already available with the Cane Commissioners and is easily accessible. Reliance is placed on the Pharma Bureau Order and PAMADA Order in the context that the data that is already in public domain does not constitute strategic and commercially sensitive information. The Enquiry Report erroneously treated the data so shared as `Sensitive Commercial Information'. No information is commercially sensitive which could have violated competition law. Even otherwise, the real reason for getting stock reports is to provide the same to the SAB whose function is to look at overall supply and demand situation on the basis which recommendations are made with respect to imports and exports. The role of SAB, therefore, cannot be ignored which requires the PSMA to verify data collected through the Cane Commissioners. There is no way that this information could be secret amongst the members of PSMA, neither does it have any role in determination of stock positions. xvii. PSMA is a separate legal entity and it is responsible for its own actions. Members of PSMA cannot be held liable for any action of PSMA. xviii. Section 34 of the Act does not permit seizure and search of cell phones. Purported search authorizations were limited to documents and computers and did not include mobile phones of the employees. Likewise, data retrieved from WhatsApp' group is not admissible. xix. Evidence annexed with Enquiry Report cannot be relied upon until authors or documents relied by the Enquiry Report are cross-examined. xx. Actus Reus i.e. actual entry into an agreement or making a decision is required which the Enquiry Report has failed to establish. xxi. There is no decision or agreement between sugar mills in the instant matter. As per the undertakings, 'decision of an association' is distinct from 'agreement between undertakings'. First, there would be need to prove the decision, only then, agreement between mills to implement that decision could be established. Even otherwise, there is no evidence as to the fact that the undertakings had actually acted upon or played a role in implementation of the alleged decision(s) by the PSMA. Evidence relied in the Enquiry Report is merely statements by the Chairman of PSMA and cannot be equated with a formal decision of PSMA itself which otherwise could be made only through a resolution passed by all concerned stakeholders in accordance with its Articles of Association. xxii. Section 4 of the Act does not encompass 'Concerted Practices'. xxiii. Right of lobbying is acknowledged by the Commission and is not an offense. xxiv. The participation in the USC tenders of 2010 and 2019 was not anti-competitive as all applicable laws, rules, regulations and procedures had been duly followed and that the documents on record attached with the Enquiry Report were not sufficient to establish any violation of Section 4 of the Act. B. GROUNDS SPECIFIC TO UNDERTAKINGS

13. The Commission issued SCNs to 84 sugar mills which are categorised below based on counsel/authorized representatives who appeared before the Commission. Group 1 - Counsel for PSMA Mr. Salman Akram Raia and Mr. Abdul Sattar Pirzada Co-Counsel for PSMA as well as Counsel for 17 other Sugar Mills:

12. First group comprises of the following: S. No. Name of Undertakings SCN No.

1. Messrs Pakistan Sugar Mills Association 56

2. Messrs Al-Abbas Sugar Mills Ltd. 103

3. Messrs Al-Noor Sugar Mills Ltd. 104

4. Messrs Army Welfare Sugar Mills Ltd 106

5. Messrs Dewan Sugar Mills Ltd. 108

6. Messrs Digri Sugar Mills Ltd. 110

7. Messrs Faran Sugar Mills Ltd. 111

8. Messrs Habib Sugar Mills Ltd. 113

9. Messrs Khairpur Sugar Mills Ltd. 114

10. Messrs Matiari Sugar Mills Ltd. 118

11. Messrs Mehran Sugar Mills Ltd 119

12. Messrs Mirpurkhas Sugar Mills Ltd 120

13. Messrs Ranipur Sugar Mills Ltd. 126

14. Messrs Sanghar Sugar Mills Ltd. 128

15. Messrs Shahmurad Sugar Mills Ltd. 130

16. Messrs Sindh Abadgar's Sugar Mills Ltd. 131

17. Messrs SGM Sugar Mills Ltd. 132

18. Messrs Tharparkar Sugar Mills Ltd. 133

15. These undertakings submitted written replies to the SCNs on 17 December 2020. Subsequently, opportunity of hearing was provided on 5 different dates (3 hearings for PSMA, and 2 hearings for the other 17 undertakings). Counsels presented arguments at length. Main arguments of the undertakings included those, which have been previously reproduced in Part A above (Common Grounds), however, the gist of the arguments specific to the undertakings in this group are restated below: i. Market is neither oligopolistic nor monopolistic; hence, no company or group is able to control quantities or prices. ii. There is sharp contrast between the present case and other cases by the Commission, such as All Pakistan Cement Manufacturers Association, PAMADA and Pharma Bureau, which were based on 'decisions' by associations. In PAMADA, the association issued direct instructions to its members. In APCMA, there was an agreement on price fixing. In Pharma Bureau, meetings were held and directives were issued pursuant to the agreement. iii. All that the Enquiry Report has to hold the undertakings culpable is communication on stock information, whereas, the context in which stock positions in Pakistan are shared has been ignored by the Enquiry Report i.e. for meaningful participation in SAB meetings. iv. Sugar sector is highly regulated, therefore, allegation in the Enquiry Report that PSMA or member mills attempted to control the supply/quantity of sugar, is erroneous. Instead of being controlled by market forces, the sugar industry is highly regulated where minimum support price is fixed by the provincial governments. Entry into the relevant market is restricted by law and export of sugar is contingent upon permission granted by the Federal Government. The role of SAB and Economic Coordination Committee (ECC) has also not been covered in the Enquiry Report. SAB determines sugar surplus subsequent to which it recommends export quantities to the Federal Government. ECC in return makes decision on sugar export which is then sent to the Federal Cabinet for approval. PSMA has been notified as a member of SAB and part of its function as its member is to monitor the stock data collected by the Cane Commissioners. v. Jurisprudential approach towards information sharing has shifted from per se to the rule of reason, given the potential benefits of information sharing for the industry. In the instant matter, there has been no anti-competitive intent behind sharing of information. The Dole test is not fully applicable in the instant matter. The undertaking relied on various American and Indian cases (discussed later). vi. The simplistic narration that PSMA manipulates surplus, exports and hence prices, is incorrect. Assertions of the Enquiry Report are not backed by facts. vii. The Enquiry Report is limited to the Punjab zone and the creation of Zonal committees. There is no evidence that these committees actually functioned or at least attempted to control local sales. viii. The right to lobby the Government for deregulation of prices is recognized by the Commission in its order in the matter of Jamshoro Joint Venture and LPG Association. The right to lobby is further recognized by the Commission in the 2010 provisional PSMA Order. Group 2 - Counsel Mr. Shehzad Elahi from Cornelius Lane and Mufti

16. Second group of undertakings consists of the following 13 undertakings, who submitted their written replies to SCNs on 17 December 2020: Sr. No Name of Undertakings SCN No.

1. Messrs SW Sugar Mills Ltd. (Chishtia) 65

2. Messrs Baba Farid Sugar Mills Ltd. 61

3. Messrs Indus Sugar Mills Ltd. 77

4. Messrs JDW-I Sugar Mills Ltd. 80

5. Messrs JDW-II Sugar Mills Ltd. 81

6. Messrs JDW-III Sugar Mills Ltd. 112

7. Messrs Layyah Sugar Mills Ltd. 84

8. Messrs Safina Sugar Mills Ltd. 85

9. Messrs Noon Sugar Mills Ltd. 88

10. Messrs Sheikhoo Sugar Mills Ltd. 94

11. Messrs RYK Sugar Mills Ltd. 98

12. Messrs Al-Moiz II Sugar Mills Ltd. 101

13. Messrs Al-Moiz Industries (Unit-I) 137

17. Opportunity of hearing was availed by these undertakings on four occasions, when Counsel presented detailed arguments in the matter. The grounds taken were similar to those taken by PSMA. However, few arguments specific to these undertakings are reproduced herein below: i. Enquiry Report suffers from procedural defects such as improper exercise of discretion and lack of jurisdiction and proper authorization of the Enquiry Committee. ii. The Enquiry Report, which is the basis of the SCNs, is general in nature and makes no specific mention of any agreement reached by the respondents, nor does it otherwise relate specifically to the respondents. Hence, the Commission could not have been satisfied as required under section 30 of the Act about purported contraventions at time of issuing SCNs. iii. Sales are made by sugar mills on an ex-mill basis, to wholesalers and final customers. iv. Denied the existence of coordination committees. Information was shared with PSMA directly, not through coordination committees. Information sharing is not denied, however, it is claimed to have been done for legitimate purposes. It was done on purpose keeping the circumstances of the country in view. v. Inference of Enquiry Report is incorrect that if individual mills shared data on stock, it had helped them to devise future strategies or that sharing of stock data had made them aware of each other's stock so they had lobbied the Federal Government to affect prices in the market. However, what benefit or competitive edge the mills had gained is not proved in the Enquiry Report. There is neither any proof in the Enquiry Report which establishes that availability of sensitive data with the mills served a sinister purpose for their advantage. vi. The mandate of the Enquiry Report was to check refusal to supply which was concluded very briefly in the Enquiry Report that there was no collective refusal to supply. vii. USC has had a bad track record of payment to sugar mills which made them reluctant to participate in its tenders. The Government requested PSMA to play a positive role. PSMA is just a letterbox in this matter. However, the PSMA does not decide capacity or quantity, rather, only convinces mills to participate in the tender. viii. On the allegation relating to stoppage of crushing, entire reliance of Enquiry Report is placed on a Report by the Cane Commissioner Punjab (Annex F1 to the Enquiry Report). Only a presumption can be made as to whether it is prepared by the Cane Commissioner or not since there is no documentary chain attached with it detailing how it was obtained or came in possession of the Enquiry Committee. Hence, it has no legal value. Sugar mills operate on the basis of ground realities and the fact is that crushing was ceased on account of non-availability of sugarcane, as is evident from the Enquiry Report. ix. SCNs against the undertakings are premature because the SCN against PSMA needs to be decided first. x. The respondents are not liable for actions of their employees who participated in alleged meetings of the PSMA. xi. Paragraph 76 of the Enquiry Report mentions/reproduces minutes of the 52nd AGM, however, these statements are not included in Annex B5 where the minutes are placed. There is a similar discrepancy with regards to proceedings of the 54th AGM placed at Annex B7. xii. The following cases were emphasized and relied upon by Counsel: a. The Commission's PAMADA Order where member undertakings were found not liable for not implementing the decisions of PAMADA. Reliance was also placed on the excerpt of the Pakistan Banking Association Order regarding implementation of decisions by the association. b. The Pharma Bureau Order and the Competition Commission of India's Order in the matter of Alleged Cartelization in Flashlights Market in India were relied upon to argue that information exchanges in the said cases were not held to be anti-competitive. c. The Indian Competition Commission's sugar order where it was emphasized that the sugar sector in India is similar to Pakistan and in such a similar environment, the participation of undertakings in a meeting to purportedly impose a minimum ex-floor price and the conduct of exchanging data was not found to be anti-competitive. Moreover, in such a regulated environment it was observed by the Indian Competition Commission that cartelization was a remote possibility and that government intervention distorts competition. d. The US case of Re: Baby Food Antitrust Litigation where information was exchanged but not found to be anti-competitive. Moreover, it was observed that information exchanges alone were insufficient to establish prohibited cartel-like behavior and merely treated as a 'plus factor'. e. The EU case of O2 (Germany) GmbH and Co. where it was emphasized that any assessment of the alleged concerted practices must be examined in their economic and legal context. f. The EU case of ABB Ltd. to support the argument that the burden of proof is on the Commission and that the presumption of innocence lies in favor of the undertakings. Counsel further cited the Honorable Islamabad High Court decision in Muhammad Abid Farooq v. The State and another to argue that the doctrine of presumption of innocence is enshrined in Article 10A of the Constitution. Group 3 - Counsel Barrister Sikandar Bashir Mohmand

18. Third group of undertakings consists of following 21 sugar mills, who submitted their written replies on 18 December 2020: Sr. No. Name of Undertakings SCN No.

1. Messrs Al-Arabia Sugar Mills Ltd. 58

2. Messrs Adam Sugar Mills Ltd. 59

3. Messrs Ashraf Sugar Mills Ltd. 60

4. Messrs Chanar Sugar Mills Ltd. 63

5. Messrs Etihad Sugar Mills Ltd. 66

6. Messrs Fatima Sugar Mills Ltd. 67

7. Messrs Fecto Sugar Mills Ltd. 68

8. Messrs Hamza Sugar Mills Ltd. 74

9. Messrs Ittefaq Sugar Mills Ltd. 79

10. Messrs Rasool Nawaz Sugar Mills Ltd. 75

11. Messrs Kashmir Sugar Mills Ltd. 82

12. Messrs Madina Sugar Mills Ltd. 87

13. Messrs Pattoki Sugar Mills Ltd. 89

14. Messrs Ramzan Sugar Mills Ltd. 90

15. Messrs Tandlianwala I Sugar Mills Ltd. 95

16. Messrs Tandlianwala II Sugar Mills Ltd. 96

17. Messrs Popular Sugar Mills Ltd. 97

18. Messrs Jahuarabad Sugar Mills Ltd. (Kohinoor) 99

19. Messrs JK Sugar Mills Ltd. 100

20. Messrs Deharki Sugar Mills Ltd. 109

21. Messrs Tandlianwala Sugar Mills Ltd. (Zamand) 140

19. Opportunity of hearing was availed by the undertaking on three occasions where Counsel presented detailed arguments in the matter. The grounds taken were similar to those taken by PSMA. However, few arguments specific to these undertakings are restated below: i. The evidence of lobbying relied in the Enquiry Report is insufficient. Speech of the Chairman PSMA is the primary proof of lobbying. However, the alleged speech was directed at the Government. Even otherwise, speeches cannot be treated as direct evidence. The undertakings have not received any email pertaining to sharing of production or sale quotas. ii. The Enquiry Report has not appreciated the context of the market in which sugar is exported. iii. Existence of any agreement is denied. Minutes of AGMs are relied as evidence by the Enquiry Report, whereas, merely sitting in or attending the AGMs is not objectionable. There exists no linkage or proof of participation on the part of undertakings in the alleged policy/decision or implementation of proposal. iv. JK and JDW are two separate legal entities. JK was incorporated in 2017 whereas it took part in crushing season of 2019. It cannot be held liable for making decisions since 2012. v. JK Sugar Mills to be assessed independently because it became a member of PSMA in 2018 so the allegations do not fully apply to it. vi. The allegation that mills have lobbied to their advantage is negated by the fact that decision on export is made by the Government. vii. The reason for stoppage of crushing was non-availability of sugarcane. Cane sellers have cartel and they decide when and how much to sell. It is cane sellers who withheld sugarcane and caused increase in its prices. viii. Allegation in the Enquiry Report as to bid rigging is false. It has not been denied that a competitive tender did not take place. All tenders floated by USC are governed, inter alia, by the PPRA Rules, 2004 and all persons and entities that participate in such procedures have to abide by these rules. There is no question of bidders manipulating the bidding process. The 2010 USC tender does not fall under the purview of the Commission and cannot be a subject of the Enquiry Report as it is a matter that pre-dates the Act. ix. Counsel relied upon, inter alia, EU cases pertaining to the burden and standard of proof to be applied. He also relied upon similar cases, which were also cited by other Counsels concerning the principle that a restriction of competition made due to government intervention would not be in violation of competition law. Group 4 - Authorized Representative Mr. Rashid Sadiq

20. Fourth group comprises of the following four undertakings: S. No. Name of Undertaking SCN No.

1. Messrs Haq Bahu Sugar Mills Ltd. 69

2. Messrs Macca Sugar Mills (Pvt.) Ltd. 86

3. Messrs Shahtaj Sugar Mills Ltd. 91

4. Messrs Abdullah Shah Ghazi 102

21. The undertakings submitted their replies on 17 December 2020 and availed the opportunity of hearing on three different occasions (eight dates were provided to the undertakings by the Commission, out of which five were adjourned on the Representative's request). During the hearing, the Representative made arguments on the same grounds as previous undertakings had made, however apart from denial of allegations against the undertakings, few of his assertions specific to the undertakings represented by him are as follows: i. The Commission issued generic SCNs to the undertakings for establishment of allegation, which are otherwise not established against the undertakings he has represented. Due process of law as laid down in Regulation 22 of the Competition Commission (General Enforcement) Regulations, 2007 is not followed. The allegation of Enquiry Report is adopted by the Commission in its SCNs without any examination, which has led the Commission to issue SCNs in absence of any material evidence against the undertakings. ii. The Commission should first decide the matter against the PSMA and other related undertakings for making any decision and the matter against the undertakings represented by him may be decided afterwards. iii. A request was made to the Commission to provide a copy of the opinion based on which the enquiry was initiated. However, the request has not been acceded to by the Commission on the account that the document so requested was confidential in nature and copy could not be provided. The undertakings reserved the right to get a copy of the document, which has held them culpable. iv. The undertakings have not been informed or made clear if any reference from the Federal Government was pending with the Commission. v. SCNs are missing certain factual and legal aspects. For example, the undertakings have not been informed as to what information was impounded against them during the 'enter and search' inspection. Neither were the undertakings made party to the Enquiry. The Representative relied on Omni Bus Order of the Securities and Exchange Commission of Pakistan (SECP), which holds that the decision of the SECP must be made independent of the Enquiry Report keeping in view facts of the case. vi. The Enquiry Report is unclear on the fact that how the export of sugar has impacted the prices or how the undertakings have impacted prices. The Enquiry Report is totally silent on ex-mill prices while ignoring the role of retailers and wholesale dealers. vii. The undertakings have not provided any sugar to USC. viii. As to participation in coordination committee, the undertakings asserted that the Enquiry Report has not evidenced how the meetings had any effect on competition. ix. As to the allegation related to stoppage of crushing, it is asserted that Haq Bahu Sugar Mill had to stop crushing only for 10 days on account of unavailability of sugarcane. Whereas, Abdullah Shah Ghazi Sugar Mill only functioned for a few days in 2019. x. The Enquiry Report does not take into account that prices of sugar varied across different cities of Pakistan. The undertakings have not participated or been part of the coordination committee. Merely attending PSMA AGM or coordination committee meeting is not objectionable. Even otherwise, the undertakings have not acted on any decision taken by the PSMA, hence, they cannot be held accountable. xi. Objection regarding the way only national/countrywide average price data is presented in the Enquiry Report, whereas, there is a price differential between cities. xii. Being historical in nature and already available in public domain, the information shared with PSMA is not sensitive and therefore has no effect on competition. xiii. As to the AGM held in 2012, discussion on sensitive information was not an agenda item of the meeting. Even otherwise, the member undertakings only listened to it but did not deliberate on it. As to the minutes of AGM held in 2014, closing remarks of the Chairman should not to be taken as decision. xiv. Reliance on Pharma Bureau Order in context that the price discussion does not distort competition. If the instant matter is not dealt with in the manner similar to Pharma Bureau, then Article 25 of Constitution would be violated. xv. Reliance on PFMA Order and PPA Order in the context that the Commission issued show cause notices only to the associations involved in the referred cases instead issuing it separately to member undertakings of the associations. xvi. Reliance on All India Sugar Association case in the context that sugar was essential commodity whose price depended upon many factors and there had been no impact on the prices of sugar due to information exchange among the member mills. In the Flash Light case, the Competition Commission of India has held that there must be a correlation between prices and the alleged conduct. Group 5 - Counsel Mr. Qausain Faisal Mufti

22. Fifth group of undertakings consists of following three undertakings represented by Mr. Qausain Faisal Mufti, who submitted written replies on 08 January 2021: Sr. No. Name of Undertakings SCN No.

1. Messrs Chashma-I Sugar Mills Ltd. 135

2. Messrs Chashma II Sugar Mills Ltd. 136

3. Messrs Premier Sugar Mills Ltd. 138

23. The undertakings were afforded opportunity of hearing eight times. Counsel made detailed arguments only in two hearings. Primarily, the undertakings filed an application for reconstitution of the Commission's Bench on the ground that constituting a full bench in the instant proceedings has deprived the undertakings from their right of appeal under section 41 of the Act. Furthermore, Counsel argued that there exists a conflict of interest as one member of the Bench had already been involved as enquiry officer in the sugar matter before the Commission earlier in 2009, and that one of the members on the Bench was also on the Bench of the previous order passed against PSMA. Hence, the undertakings apprehend prejudice that may be caused to the instant proceedings. In response to the application, the Commission decided to proceed with the matter on merits while holding the application to be decided later along with the final order. Therefore, application shall be decided in analysis part of the instant order. Nevertheless, the undertakings argued at length on merits including those, which are mentioned earlier in the Common Grounds. In addition to that, gist of arguments specifically related to these undertakings is summarised below: i. Chashma Sugar Mills are juristic persons separate from the PSMA. There is no evidence as to the fact that Chashma had been involved in any decision making exercise. ii. No witness is examined by the Commission, therefore, no document with the Enquiry Report is formally proved under Article 17 of Qanun-e-Shahadat Order, 1984 (QSO). iii. As per section 33 of Act, the proceedings before the Commission are of civil nature and should be treated as civil suit. The Competition Act is silent on the mode in which proceedings are to be conducted, therefore as per settled principle, the procedure laid down in the C.P.C. is to be adopted. Having said that, witnesses are neither summoned nor documents are examined. The Registrar of the Commission ought to have been brought before the Commission as witness because he issued SCNs. iv. Likewise, the Act is silent on the mode in which recovery memos are supposed to be prepared, therefore, procedure laid down in Criminal Procedure Code (Cr.P.C.) and QSO should have been adopted or otherwise it would have no value in the eyes of law. Not only that, recovery memos are not provided to the undertakings. If recovery memos are taken to be confidential documents then neither the Enquiry Report could have relied upon these documents as evidence nor could public proceedings be conducted. Emphasis is made on recovery of mobiles phones and WhatsApp messages from that mobiles. Section 34 of the Act does not encompass mobile phone which could be confiscated. Since, mobile phones are forensically analyzed, therefore, the undertakings claimed it to be valueless until forensic analysts appear as witnesses or cross-examined as per provisions of QSO. Even otherwise, a document is per se admissible, without calling the analysts as witness, only under section 510 of Cr.P.C. In any other case, the authority would need to call and examine analysts or expert and the alleged party would be given opportunity of cross-examination. Nothing is recorded in writing as to the fact that for what purpose the forensic report was obtained. v. The Enquiry is only to the extent of the Punjab zone. The mills represented by Counsel are situated in the territorial limits of KPK and the allegations in the Enquiry Report do not apply to them. There is no evidence on the record to implicate these three undertakings. Data retrieved during enquiry is related to the Punjab zone only. There is no allegation on the undertakings from KPK as to sharing of stock information. vi. There is no legal authorization available on the record on the behalf of undertakings to appoint representative for the PSMA meetings. The undertakings did not participate as juristic persons in any meeting. vii. It is admitted that at the time of infringement, the Chairman PSMA was part of Premier Sugar Mills. However, merely the fact that a telephone of an employee of the undertaking has been used would not be enough to hold the undertaking culpable. The important point is what has actually come directly from the undertaking. There must be evidence as to the fact that prohibited activity was intended or occurred. viii. All alleged minutes of PSMA meetings do not provide inference that any collective decision was taken. Mere participation in the alleged meeting would not mean collusion or decision on part of the undertaking. There is no bar on discussing stabilization of prices. Group 6 - Counsel Mr. Ali Sibtain Fazli

24. Sixth group consists of two undertakings namely Hunza I Sugar Mill Ltd. (SCN No. 71/2020) and Hunza II Sugar Mill Ltd. (SCN No. 72/2020) who filed their written replies on 3 December 2020. The undertakings were given opportunity of hearing to present their case seven times. However, Counsel availed only three dates and argued his case at length. Primarily, he asserted the same defences as covered in the Common Grounds, however, gist of few arguments specific to these two undertakings are restated below: i. Alleged stoppage of crushing occurred on account of non-availability of sugarcane. The Enquiry Report refers to the call of PSMA to close crushing but there is no evidence as to closing of crushing. As per data provided by the undertakings along with its reply to the SCNs, there were no cane trollies at the gate of the undertakings, which shows unavailability of sugarcane. ii. Information is only shared with the Cane Commissioners. Information of one sugar mill can be accessed from the Cane Commissioner by another sugar mill. Hence, information is in public domain and does not constitute sensitive commercial information. iii. As to allegation that platform of the PSMA has been used for the USC tender, it is asserted that tenders of the USC are only meant for sugar mills having membership of the PSMA. USC issues tenders through TCP, therefore, it is the Government who creates the situation where only members of PSMA could participate in USC tender. Group 7 - Self Representation through Authorized Representatives

25. Seventh group consists of the Omni Group comprising of nine sugar mills. One undertaking (New Thatta) is a sick unit. Two sugar mills (Chamber Sugar Mill and Tandu Allah Yar Sugar Mill) are not served SCNs on the account of not being members of PSMA. Remaining six undertakings listed below are served SCNs, who filed their written replies on 20 November 2020 and 21 January 2021 and were represented through the company officials: Sr. No. Name of Undertaking SCN No.

1. Messrs Khoski Sugar Mills Ltd. 115

2. Messrs Larr Sugar Mills Ltd. 117

3. Messrs Naudero Sugar Mills Ltd. 123

4. Messrs New Dadu Sugar Mills Ltd. 124

5. Messrs Bawany Sugar Mills Ltd. 107

6. Messrs Ansari Sugar Mills Ltd. 105

26. These undertakings availed opportunity of hearing on two different dates and briefly made assertion which are given below: i. Ansari Sugar Mills, a member of PSMA, is the only undertaking that is a listed company and represented the Omni Group on PSMA forum since 2015, whereas, other undertakings are not members of PSMA. The undertaking had attended the PSMA's meetings to discuss varieties of sugarcane and legal actions brought by the farmers against mills. However, the process of attending meetings has been discontinued for last three years. The only representative who would represent the Omni Group on PSMA forum is behind the bars since last year. ii. The undertakings have been under investigation and surprise inspections by different government agencies. Accounts are frozen whereas representative of the FBR have been constantly watching over for last two years to make sure that the undertakings have not held any carryover stock from the preceding year. Crushing and sugar production is carried out at a very limited capacity due to liquidity problems and sugar stocks finish soon. Therefore, the undertakings have not been in position to hold sugar stock in current season. iii. Last export by the undertakings was done in the year 2017-18. Last profit was made in 2016. Financial Statements have not been audited since 2017. iv. Sugar is a very competitive market. PSMA has different provincial chapters that do not operate together. It also has different committees, chairmen and separate dynamics. v. It is admitted that here are no barriers or checks over trans-provincial movement of sugar or sugarcane. vi. As to Bawany's participation in the USC tender, it is asserted that the Omni Group did not own Bawany in 2010. It was bought by the Group in 2011. vii. The undertakings denied to have supplied any information on stocks to the PSMA since such exercise would cause no effect on prices or advantage for the undertakings. It is claimed that purpose of sharing information is only to pursue the Government to take timely decisions on export, failing which, blame for not informing the Government timely would be put on the undertakings. However, the undertakings admitted to have not refused PSMA to comply with the decision of PSMA taken in 47th AGM. viii. It is admitted that the purpose of participation in Sindh Zonal Committee was to reflect on broader issues of the sugar sector. Group 8 - Self Representation through Authorized Representatives

27. This group consists of undertakings who submitted their replies on different dates and appeared in their individual capacity. These undertakings along with gist of their arguments are mentioned below: Messrs Husein Sugar Mill Ltd.

28. The undertaking filed its reply to the SCN No. 76/2020 on 21 November 2020 and opportunity of hearing was availed on two different dates. The officials of the undertaking appeared and argued the case at length. Gist of arguments specific to the undertaking is given below: i. The undertaking plainly denied to have attended any meeting of the PSMA where alleged decision was made. However, it is admitted that the undertakings participated in the PSMA's meetings to discuss recommendations for changes to legislations. ii. It is claimed that the sugar industry is highly regulated and markets condition makes it inevitable to export sugar. The PSMA had been printing ads in every major newspaper asking the government to allow export without any subsidy. iii. The undertaking denied existence of any coordination on stock positions. It is claimed that different undertakings have a different percentage of stock sold/left over. Therefore, each undertaking in the industry is working on the basis of its own working capital requirements. iv. It is asserted that the coordinators in the coordination committee are all CFOs who are not entrusted with a job to sell sugar. The purpose of the coordination committees is solely to recommend legislative changes. However, the undertaking denied attendance in any meeting of the coordination committees. v. Fact of the industry is that the undertakings with no political affiliations suffer. vi. As to allegation of cessation of crushing activity, the undertaking noted that the Cane Commissioner included its name mistakenly. Any decision of stoppage of crushing would not have made economic sense when majority of the undertakings had remained open and only 15 were closed. On top of that, the undertakings would have incurred cost due to closure of crushing. The reason behind stoppage of crushing was unavailability of sugarcane since the grower was not ready to provide sugarcane at a price unviable to them. Once price for sugarcane arose the undertakings started receiving sugarcane. vii. It is argued that cost incurred for production of sugar, as stated in the Enquiry Report did not take into account cost of sales and sales tax. The undertaking disagreed with the figures for cost of production since it varied from undertaking to undertaking and region to region. The Enquiry Report is claimed to have ignored the fact that shortage of sugar caused by other stakeholders in the industry is the real reason behind increase in prices. viii. The undertaking has blamed distinct Government policies in the Provinces, which are not addressed by the Enquiry Report, as a real reason for distortion of competitive condition in the industry. Messrs Shakarganj (I and II) Sugar Mills Ltd.

29. The undertakings submitted rely to the SCN Nos. 92/2020 and 93/2020 on 21 November 2020 and availed opportunity of hearing on two different dates. Gist of arguments specific to these undertakings are as follows: i. The Enquiry Report has considered the undertakings as big producers by erroneously calculating market share of the mills as 5%. Actual market share of the undertaking is only 0.94%. ii. Due to financial constraints, large amount of stock of the undertaking is sold during the crushing season in order to generate working capital. Therefore, the undertaking is not usually left much of the stock at the end of crushing season; leaving it in a position not to participate in any cartel arrangement for stock sharing and/or for increasing prices. iii. The undertaking neither exported the sugar for last 3 years nor claimed subsidy for the exports it has previously made. iv. Production unit of the undertakings were closed on account of non-availability of sugarcane, not on account of the PSMA call. v. With regard to ceasing crushing, the undertakings denied to have coordinated with PSMA. Instead, it was admitted that it had a difference of opinion with PSMA with regard to commencement of crushing and PSMA expressed its reservations to the undertaking for not followings its directions, when no other undertaking had operated in October. It was stated that this reflects that the undertaking has not colluded with PSMA. vi. Shakarganj has never denied supply to USC even during financial crunch and were ready to supply sugar against Letter of Credit of around 1000 MT (willing to negotiate contingent upon clearance of dues). The representative noted that they deal with USC themselves and PSMA has no role to play. vii. The undertakings are members of PSMA, however, they have not had any active participation nor exchanged any data with it. Messrs Kiran Sugar Mill Ltd.

30. The undertaking submitted its reply to SCN No. 116/2020 on 16 November 2020 and availed opportunity of hearing on two different dates to make brief arguments. Primarily, it claimed to have received no subsidy from the Government nor has it been a member of PSMA. Moreover, it is also claimed that the allegation as to sugar stock or sharing information with respect to sugar stock is not sustainable for the reason that the undertaking has low production capacity and would sell its entire sugar stock during the season. Messrs Seri Sugar Mills Ltd. and Messrs TMK Sugar Mills Ltd.

31. The two undertakings, represented by the same representative, submitted their reply to SCNs Nos. 129/2020 and 134/2020 on 24 February 2021 and availed opportunity of hearing on two different dates to make brief arguments. Primarily, it admitted to have PSMA's membership, however, it claimed that such membership had become redundant on account of non-payment of membership fee since 2012. It was further claimed that the undertakings have not been in operation since 2012. Consequently, it was claimed, the undertakings have had no participation in any of the meetings held by PSMA. Messrs Imperial Sugar Mills Ltd.

32. The undertaking submitted its reply to SCN No. 78/2020 on 02 December 2020, availed opportunity of hearing on two different dates and made brief arguments as under: i. It is claimed that the only evidence in the Enquiry Report against the undertaking is participation in the PSMA's 47th AGM dated 17 October 2012. Membership of the undertaking is suspended since 2014. ii. Furthermore, it is claimed that the undertaking comprises two production units located in Mian Channu and Phalia, former is already sold in 2017, whereas latter is not in operation since 2014 and open for sale. Therefore, the undertakings have not been involved in any production activities since 2017-18. The undertaking also claimed to have shifted business activities from sugar sector to investment sector, for that reason and changed its name in 2020 from 'Colony Sugar Mill' to 'Imperial Sugar Mill'. Messrs Khazana Sugar Mills Ltd.

33. The undertaking filed written reply to the SCN No. 139/2020 on 12 December 2020 wherein it simply denied to have any coordination with the PSMA. Representative for the undertaking, Mr. Muhammad Haroon, appeared before the Commission for hearing on 11 February 2021, when it was stated that the mill was an inactive member of PSMA since the last 10 to 15 years and had not participated in any meeting of PSMA. Messrs Sakrand Sugar Mills Ltd.

34. The undertaking submitted its reply to SCN No. 127/2020 on 19 January 2021 and availed opportunity of hearing on two different dates. It argued as follows: i. It has the lowest market share in terms of stocks positions or production. The undertaking claimed to have issues with the stocks which ends even at the beginning of the year leaving behind nothing to export or to contribute in any alleged actions of the PSMA. ii. The undertaking also denied to have participated in alleged annual meetings of the PSMA and claimed itself to have kept itself separate from the PSMA. The undertaking denied to have obtained any benefits from the decisions of the PSMA. It also plainly denied to have endorsed any decision taken by the PSMA. The undertaking also claimed that neither it has ever supplied sugar to the USC nor has capacity to supply. iii. It is admitted that the undertaking is member of the PSMA, receives information in the form of circulars and provides information to the PSMA randomly if it requires. However, due to less voting shares, it claimed to have very little value in the PSMA. iv. It is admitted that the undertaking can sell sugar anywhere, there is no restriction on sale. Messrs Abdullah Sugar Mill

35. The undertaking filed its reply to SCN No. 57/2020 on 08 December 2020, availed opportunity of hearing on two different dates and briefly claimed suspension of its membership since 2013 on account of non-payment of membership fee to the PSMA. However, no evidence is produced in this regard. The undertaking also denied export of sugar and claimed to have sold its sugar stock in the domestic market. As to the year 2019-20, it is claimed that its crushing activity was stopped in March 2020 when the District Commissioner confiscated its sugar stock on account of non-payment to farmers. Messrs Chaudhary Sugar Mill

36. The undertaking submitted its reply to SCN No. 64/2020 on 18 December 2020 and availed opportunity of hearing on two different dates and argued as under: i. Primarily, it claimed to have relocated from one geographical area to another. After relocation, the Supreme Court of Pakistan barred production activity in 2017. The undertaking claimed to have not been in operation since then nor shared any information on sugar stocks with the PSMA in the alleged meeting. As to the PSMA's membership, the undertaking claimed to have no active membership on account of non-payment of fee, hence, denied its participation in any meeting of PSMA since 2017. However, it admitted to have received letters from the PSMA even after 2017 which were not responded by the undertaking on account of inactive operations. ii. As to the presence of its data on production and stock position in the record of the PSMA, the undertakings stated that the last information shared with the PSMA was in March 2016 when the purpose of sharing information was to assist the Government and SAB through the PSMA. However, the undertaking claimed to be unaware of the fact that how information pertaining to September 2016 had reached the PSMA, which originally was shared by the undertaking only with the Cane Commissioner. iii. As for the undertaking's attendance of the 52nd AGM of PSMA held on 2 January 2018, it was solely for the purpose of Agenda items related to the annual review of sugar for the year 2016-2017 and approval of audited accounts for the year 2016-2017 as the undertaking had still been partially operational at the time. iv. The undertaking also argued that it had not been a part of any zonal committee or attended any meeting which had the agenda of forming a zonal committee. v. As for export of sugar, the undertaking simply claimed to have exported very little quantity of sugar so far. Messrs Haseeb Waqas Sugar Mills Ltd.

37. The undertaking submitted its reply to SCN No. 70/2020 on 17 April 2021 and availed opportunity of hearing on two different dates. Primarily, it claimed to be no more member of the PSMA since 2014 on account of non-payment of membership fee. Further, it denied attendance of any meeting of the coordination committee of the PSMA as well as sharing of any information on its stocks with members of the PSMA. It also claimed to have no carry over stock, however, provided information on its stock position only to the Cane Commissioner. Moreover, the undertaking claimed to be no more in operations since 2016 on account of its closure by Order of the Supreme Court after its relocation. As to the export, the undertaking denied any export on its part. Kamalia Sugar Mills

38. Kamalia was issued SCN No. 83/2020 on 4 November 2020. In furtherance of its reply dated 25 May 2021, Counsel for the undertaking presented oral arguments on 26 May 2021 as under: i. Kamalia had no knowledge of documents provided in Enquiry Report and denied involvement in any anti-competitive activities. ii. Kamalia had sold its entire assets to Two Star industries. This was after crushing season 2015-16. Kamalia has attached a letter of Two Star dated 15 November 2016 in which Two Star is informing the Cane Commissioner that it is commencing crushing, which shows that Two Star was operating the business. iii. The reason that the business was sold because the price of sugar in the years leading up to sales was below cost of production. Kamalia and its employees did not attend the alleged meetings. iv. Kamalia requested the Bench to take a lenient view keeping in mind the fact that information was for period after sale of the mill. Group 9 - No Appearance

39. Following is the group of undertakings which are served SCNs, however, these three undertakings neither submitted written replies nor availed opportunity of hearing before the Commission despite service of notice that if no appearance is tendered or right of hearing is not availed, the Commission shall proceed ex parte: Sr. No. Name of Undertaking SCN No.

1. Messrs Mirza Sugar Mills Ltd. 121

2. Messrs Najma Sugar Mills Ltd. 122

3. Messrs Brothers Sugar Mills Ltd. 62 Group 10 - No Appearance: where SCNs' were not received but published

40. This category consists of two undertakings, which did not receive the SCN, therefore, the Commission decided to publish SCNs in the newspaper. Despite such publication, these undertakings did not appear before the Commission. Hence, the Commission has proceeded ex-parte: Sr. No. Name of Undertaking SCN No.

1. Messrs Pangrio Sugar Mills Ltd. 125

2. Messrs Huda Sugar Mills Limited 73

41. It is only appropriate to acknowledge all undertakings cooperated in the conduct of these proceedings. In particular, we record our appreciation for the able assistance rendered by Mr. Salman Akram Raja and Mr. Shehzad Elahi. ISSUES

42. In light of the written submissions, arguments and evidence presented by the undertakings, and the contents of the SCNs and the Enquiry Report, the following main issues arise in determining whether the undertakings are in violation of Section 4 of the Act: I. Whether PSMA and the undertakings have shared sensitive commercial stock information amongst themselves with the object or effect of distorting competition in the relevant market in violation of section 4(1) read with section 4(2)(a) of the Act? II. Whether the undertakings, including PSMA, made a collective decision to determine export quantities, amounting to fixing or setting/controlling supply of white refined sugar in the relevant market in violation of section 4(1) read with section 4(2)(c) of the Act? III. Whether such collective determination of export quantities led to an increase in or maintenance of a desired price level in the relevant market in violation section 4(1) read with section 4(2)(a) of the Act? IV. Whether PSMA made a decision/practice of creating zonal divisions in Punjab to coordinate sales, stock positions and production quota to monitor and control quantity to be sold in violation of section 4(1) read with section 4(2)(a) of the Act? V. Whether PSMA and its member undertakings who participated in the 2019 and 2010 USC tenders respectively took a collective decision/indulged in a collective bargaining practice to fix and divide the quantity of sale among themselves in violation of section 4(1) read with section 4(2)(c) of the Act? VI. Whether PSMA decided to cease crushing of sugarcane, thus, as a result of such decision, 15 undertakings in the Punjab zone ceased crushing activity in violation of section 4(1) read with section 4(2)(a) of the Act?

43. For ease of reference and to facilitate a focused analyses, we classify undertakings in the following groups based on each issue or violation alleged to have been committed, relevant to the undertakings: Issue I - Sharing of Sensitive Commercial Information - 2012 to 2020 (Punjab Mills) 1 Abdullah Sugar Mills Ltd. 2 Al Arabia Sugar Mills 3 Adam Sugar Mills Ltd. 4 Ashraf Sugar Mills Ltd. 5 Baba Farid Sugar Mills Ltd. 6 Brothers Sugar Mills Ltd. 7 Chanaar Sugar Mills Ltd. 8 Chaudhry Sugar Mills Ltd. 9 SW Sugar Mills Limited (Formerly Chishtia) 10 Eithad Sugar Mills Ltd. 11 Fatima Sugar Mills Ltd. 12 Fecto Sugar Mills Ltd. 13 Haq Bahu Sugar Mills Ltd. 14 Haseeb Waqas Sugar Mills Ltd. 15 Hunza I Sugar Mills Ltd. 16 Hunza II Sugar Mills Ltd. 17 Huda Sugar Mills Ltd. 18 Hamza Sugar Mills Ltd. 19 Rasool Nawaz Sugar Mills Ltd. 20 Hussein Sugar Mills Ltd. 21 Indus Sugar Mills Ltd. 22 Ittefaq Sugar Mills Ltd. 23 JDW-I Sugar Mills Ltd. 24 JDW-II Sugar Mills Ltd. 25 Kashmir Sugar Mills Ltd. 26 Kamalia Sugar - Two Star Mills Ltd. 27 Layyah Sugar Mills Ltd. 28 Safina Sugar Mills Ltd. 29 Macca Sugar Mills (Pvt.) Limited 30 Madina Sugar Mills Ltd. 31 Noon Sugar Mills Ltd. 32 Pattoki Sugar Mills Ltd. 33 Ramzan Sugar Mills Ltd. 34 Shahtaj Sugar Mills Limited 35 Shakarganj I Mills Limited 36 Shakarganj II Mills Limited 37 Sheikhoo Sugar Mills Ltd. 38 Tandlianwala I Sugar Mills Limited 39 Tandlianwala II Sugar Mills Limited 40 Imperial Sugar Mills Ltd. 41 Popular Sugar Mills 42 R.Y.K. Sugar Mills Ltd. 43 Jauharabad (Formerly Kohinoor) Sugar Mills Ltd. 44 JK 45 Almoiz II Sugar Mills Ltd. 46 PSMA Issue II & III - Collective Decision Export Quantities and resultant Control of Supply - 2012 to 2020 1 Abdullah Sugar Mills Ltd. 2 Al Arabia Sugar Mills 3 Adam Sugar Mills Ltd. 4 Ashraf Sugar Mills Ltd. 5 Baba Farid Sugar Mills Ltd. 6 Brothers Sugar Mills Ltd. 7 Chanaar Sugar Mills Ltd. 8 Chaudhry Sugar Mills Ltd 9 SW Sugar Mills Limited (Formerly Chishtia) 10 Eithad Sugar Mills Ltd. 11 Fatima Sugar Mills Ltd. 12 Fecto Sugar Mills Ltd. 13 Haq Bahu Sugar Mills Ltd. 14 Haseeb Waqas Sugar Mills Ltd. 15 Hunza I Sugar Mills Ltd. 16 Hunza II Sugar Mills Ltd. 17 Huda Sugar Mills Ltd. 18 Hamza Sugar Mills Ltd. 19 Rasool Nawaz Sugar Mills Ltd. 20 Hussein Sugar Mills Ltd. 21 Indus Sugar Mills Ltd. 22 Ittefaq Sugar Mills Ltd. 23 JDW-I Sugar Mills Ltd. 24 JDW-II Sugar Mills Ltd. 25 Kashmir Sugar Mills Ltd. 26 Kamalia Sugar - Two Star Mills Ltd. 27 Layyah Sugar Mills Ltd. 28 Safina Sugar Mills Ltd. 29 Macca Sugar Mills (Pvt.) Limited 30 Madina Sugar Mills Ltd. 31 Noon Sugar Mills Ltd. 32 Pattoki Sugar Mills Ltd. 33 Ramzan Sugar Mills Ltd. 34 Shahtaj Sugar Mills Limited 35 Shakarganj I Mills Limited 36 Shakarganj II Mills Limited 37 Sheikhoo Sugar Mills Ltd. 38 Tandlianwala I Sugar Mills Limited 39 Tandlianwala II Sugar Mills Limited 40 Imperial Sugar Mills Ltd. 41 Popular Sugar Mills 42 R.Y.K. Sugar Mills Ltd. 43 Jauharabad (Formerly Kohinoor) Sugar Mills Ltd 44 JK 45 Almoiz II Sugar Mills Ltd. 46 Abdullah Shah Ghazi Sugar Mills Ltd. 47 Al-Abbas Sugar Mills Ltd. 48 Al-Noor Sugar Mills Ltd. 49 Ansari Sugar Mills Ltd. 50 Army Welfare Sugar Mills Ltd. 51 Bawany Sugar Mills Ltd. 52 Dewan Sugar Mills Ltd. 53 Deharki Sugar Mills Ltd. 54 Digri Sugar Mills Ltd. 55 Faran Sugar Mills Ltd. 56 J.D.W-III Sugar Mills Ltd. 57 Habib Sugar Mills Ltd. 58 Khairpur Sugar Mills Ltd. 59 Khoski Sugar Mills Ltd. 60 Kiran Sugar Mills Ltd. 61 Larr Sugar Mills Ltd. 62 Matiari Sugar Mills Ltd. 63 Mehran Sugar Mills Ltd. 64 Mirpur Khas Sugar Mills Ltd. 65 Mirza Sugar Mills Ltd. 66 Najma Sugar Mills Ltd. 67 Naudero Sugar Mills Ltd. 68 New Dadu Sugar Mills Ltd. 69 Pangrio Sugar Mills Limited 70 Sakrand Sugar Mills Ltd. 71 Sanghar Sugar Mills Ltd. 72 Seri Sugar Mills Ltd. 73 Shahmurad Sugar Mills Ltd. 74 Sindh Abadgars Sugar Mills Ltd. 75 SGM Sugar Mills Ltd. 76 Tharparkar Sugar Mills Ltd. 77 Ranipur Sugar Mills Ltd. 78 Chashma-I Sugar Mills Ltd. 79 Chashma-II Sugar Mills Ltd. 80 Al-Moiz I Sugar Mills Ltd. 81 Premier Sugar Mills 82 Khazana Sugar Mills Ltd. 83 Tandlianwala Zamand 84 TMK 85 PSMA Issue IV - Zonal Divisions - 2017 to 2020 (Punjab Mills) 1 Abdullah Sugar Mills Ltd. 2 Al Arabia Sugar Mills 3 Adam Sugar Mills Ltd. 4 Ashraf Sugar Mills Ltd. 5 Baba Farid Sugar Mills Ltd. 6 Brothers Sugar Mills Ltd. 7 Chanaar Sugar Mills Ltd. 8 Chaudhry Sugar Mills Ltd. 9 SW Sugar Mills Limited (Formerly Chishtia) 10 Eithad Sugar Mills Ltd. 11 Fatima Sugar Mills Ltd. 12 Fecto Sugar Mills Ltd. 13 Haq Bahu Sugar Mills Ltd. 14 Haseeb Waqas Sugar Mills Ltd. 15 Hunza I Sugar Mills Ltd. 16 Hunza II Sugar Mills Ltd. 17 Huda Sugar Mills Ltd. 18 Hamza Sugar Mills Ltd. 19 Rasool Nawaz Sugar Mills Ltd. 20 Hussein Sugar Mills Ltd. 21 Indus Sugar Mills Ltd. 22 Ittefaq Sugar Mills Ltd. 23 JDW-I Sugar Mills Ltd. 24 JDW-II Sugar Mills Ltd. 25 Kashmir Sugar Mills Ltd. 26 Kamalia Sugar - Two Star Mills Ltd. 27 Layyah Sugar Mills Ltd. 28 Safina Sugar Mills Ltd. 29 Macca Sugar Mills (Pvt.) Limited 30 Madina Sugar Mills Ltd. 31 Noon Sugar Mills Ltd. 32 Pattoki Sugar Mills Ltd. 33 Ramzan Sugar Mills Ltd. 34 Shahtaj Sugar Mills Limited 35 Shakarganj I Mills Limited 36 Shakarganj II Mills Limited 37 Sheikhoo Sugar Mills Ltd. 38 Tandlianwala I Sugar Mills Limited 39 Tandlianwala II Sugar Mills Limited 40 Imperial Sugar Mills Ltd. 41 Popular Sugar Mills 42 R.Y.K. Sugar Mills Ltd. 43 Jauharabad (Formerly Kohinoor) Sugar Mills Ltd 44 JK 45 Almoiz II Sugar Mills Ltd. 46 PSMA Issue V - USC Tenders USC 2019 Tender 1 Indus 2 Shakarganj I 3 Shakarganj II 4 Shahtaj 5 Layyah 6 Safina 7 Almoiz II Sugar Mills 8 Ashraf 9 JDW -1 10 JDW - II 11 Huda 12 Fatima 13 Pattoki 14 Etihad 15 Two Star (Kamalia) 16 Sheikhoo 17 Hunza I 18 Hunza II 19 RYK 20 PSMA USC 2010 Tender 1 SW Sugar Mills 2 Ramzan 3 Chashma 4 Tandlianwala I 5 Tadlianwala II 6 Tadlianwala (Zamand) 7 Fatima 8 Hamza 9 Ittefaq 10 Kashmir 11 JDW - I 12 JDW -II 13 JDW - III 14 Channar 15 Indus 16 Bawani 17 Faran 18 Al-Abbas 19 Shah Murad 20 Mirpur Khas 21 Safina 22 Layyah 23 Hunza I 24 Hunza II 25 Al-Noor 26 Almoiz Industries (Unit-I) 27 Almoiz II Sugar Mills 28 Digri 29 Sanghar 30 PSMA Issue VI - Cease Crushing of Sugarcane - 2019-2020 Crushing Season 1 Chanar 2 Hunza I 3 Husein 4 SW Sugar Mills 5 Huda 6 Safina 7 Two Star (Kamalia) 8 Madina 9 Tandlianwala I 10 Hunza II 11 JK 12 Haq Bahu 13 Layyah 14 Shakarganj II 15 Baba Farid 16 PSMA

44. Arguments by Counsel on behalf of the undertakings, as outlined above, are discussed in turn with reference to the relevant issue. ANALYSIS C. PRELIMINARY/TECHNICAL OBJECTIONS

45. Briefly, the undertakings have raised the following broad preliminary/technical objections i. Constitutional challenge to the vires of the Act. ii. No evidence of any decisions made by the Commission in relation to the delegation of powers to the Registrar, the Secretary and the Enquiry Officers. No proof of authorization of the 'enter and search' or forming of any opinion by the Commission before initiating proceedings under Section 30 of the Act. iii. The undertakings were not provided with any reasons and material on the basis of which the Enquiry Committee was reconstituted and TORs were amended. The Enquiry proceedings were not initiated as per the principles laid down in the National Feeds case. iv. Erroneous definition of the relevant market and SCNs do not state the 'spill ' over effect' as determined by the Honourable Lahore High Court in the LPG Association case. v. Data was illegally obtained from FBR in violation of section 155H of Customs Act, 1969. vi. Burden of proof or evidential burden is on the Commission to establish violations of section 4 of the Act, which the Enquiry Report has failed to do. The standard of proof to be applied by the Commission is that of criminal proceedings where the infringement being proved by the Commission must be done through direct evidence which is beyond reasonable doubt. vii. Presumption of innocence is in favour of the undertakings, i.e., where the proof is not of the required standard, the benefit of the doubt must be given to the undertakings concerned. viii. Evidence/data obtained from mobile phones is inadmissible and even otherwise, as articles of evidence were collected illegally due to procedural lapses, the same are inadmissible. ix. The undertakings were not included or requested to provide information at the Enquiry stage before the issuance of the SCNs.

46. The Commission deems it pertinent to address the aforementioned preliminary/technical objections in turn before proceeding further to the main issues specified above. Constitutional Grounds

47. At the outset, it is a matter of record that a three-Member Bench of the Honourable Lahore High Court has upheld the Act as being constitutionally valid and has dismissed challenges assailing the legislative competence of the Federation to enact law on competition (see: LPG Association of Pakistan v. Federation of Pakistan 2021 CLD 214). Currently, the matter is pending adjudication before the Supreme Court of Pakistan.

48. The Commission has held time and again in its previous orders including the LPG Association of Pakistan and Jamshoro Joint Venture Ltd. Order dated 14 December 2009 (the "JJVL/LPGAP Order") that it is not for the Commission to address the objections raised as to the constitutionality and validity of the Act (Reliance is placed on Pir Sabir Shah v. Shad Muhammad Khan, Member Provincial Assembly N.W.F.P. PLD 1995 SC 66, Akhtar Ali Parvez v. Altaf ur Rehman PLD 1963 Lahore 390, Mehr Dad v. Settlement and Rehabilitation Commissions PLD 1974 SC 193 and Chempak (Pvt) Ltd. v Sindh Employees' Social Security Institution (SESSI) 2003 PLC 380).

49. The aforementioned principle was also broadly stated in the case of Muhammad Khan and others v. Province of Punjab and others 2007 SCMR 1169, which pertained to a land dispute, wherein the Honourable Supreme Court observed that "so far as special judicial tribunals are concerned, they are given jurisdiction to determine certain fact but they are not judges of the facts which are the foundation of their jurisdiction nor can they define the limits of their own jurisdiction." There appears no reason to change the Commission's view on this point.

50. Hence, we proceed on the assumption that the existence of the Commission and the Act where under it exercises power is legal and valid. Procedural Lapses and Admissibility of Evidence

51. The undertakings have broadly argued that the requisite approval/authority was not duly delegated to the Enquiry Officers, the Registrar and the Secretary to the Commission. Hence, SCNs issued under section 30 of the Act are invalid. These are not issued by the competent authority and that the search and inspection carried out by the officers of the Commission was also illegal and without lawful authority. Even otherwise, the undertakings have argued that the Act vests intrusive, excessive and unconstitutional powers to enter and search premises in terms of section 34 of the Act. Also, undertakings were not provided any reasons or material basis for the amendments of TORs of the Enquiry Committee and that the undertakings were not provided with an opportunity of hearing during the Enquiry proceedings. In light of the above, the undertakings maintain that all documents and evidence collected are inadmissible as the same were collected without following due process and legal procedures. In addition, undertakings have relied on the case of National Feeds Limited v. Competition Commission of Pakistan and others, 2016 CLD 1688 stating that sufficient reasons were not present or provided to initiate an enquiry under the Act.

52. Section 28(2) of the Act provides the Commission with the power to delegate all or any of its functions and powers to any of its Members or officers as it deems fit. In this connection, the Commission duly provided all requisite authorizations, which are available on Commission's record: i. Initiation of Enquiry in the Commission meeting held on 19 December 2019; ii. Re-constitution of the Enquiry Committee and amendment of ToRs in the Commission meeting held on 7 September 2020; iii. Authorization of search and inspections under section 34 of the Act in the Commission meeting held on 10 September 2020 and via Resolution by Circulation dated 23 September 2020; and iv. Initiating proceedings under section 30 of the Act and issuance of SCNs in the Commission meeting held on 22 October 2020.

53. Also, in the meeting of 7 September 2020, the Commission delegated all powers under sections 33, 36 and 50 of the Act to the Enquiry Committee during the course of the Enquiry, which includes, the discovery and production of any document or other material object as evidence (section 33(1)(b) of the Act).

54. With regard to the power of the Secretary and the Registrar, attention is drawn to Regulation 5(m) of the Competition Commission (Duties and Responsibilities of Registrar) Regulations, 2016 where under the Registrar is competent to draft and issue the show cause notice, with approval of the competent authority (which was duly given by the Commission in meeting dated 22 October 2020). The Commission in its meeting held on 10 September 2020 and through Resolution by Circulation dated 23 September 2021 specifically authorized the Secretary to the Commission to issue the authorization for the Search and Inspections under section 34 of the Act.

55. We now advert to the arguments that the ToRs of the Enquiry Committee were amended suddenly without any reasonable basis, that the Commission could not have initiated an enquiry based on/with reference to the findings of the Sugar Inquiry Commission and that sufficient reasonable grounds as well as a prima facie opinion must be formed by the Commission to initiate an enquiry. In this regard, the Commission does not find merit in the arguments. Rather, it appears to be an attempt to deviate from the actual issues at hand. As briefly narrated above, the Commission in its meeting dated 19 December 2019 was presented with a working paper titled "Possible anti-competitive activities in the Sugar Industry". Pursuant to that, the Commission decided to conduct a suo motu investigation into the matter and the Enquiry Committee was constituted with the approved ToRs to review the sugar industry in terms of clauses (b) and (c) of subsection (1) of section 28 read with Section 37 of the Act and to ascertain the state of competition in the sugar industry while taking into account various aspects which included, inter alia, the cost of production of sugar (the "Initial Enquiry").

56. We note that during the pendency of the Initial Enquiry, the letter dated 27 July 2020 was received from the Advisor to the Prime Minister on Accountability and Interior with regard to the findings of the Sugar Inquiry Commission, which the Commission treated as a reference under section 37(1) of the Act and directed the Cartels and Trade Abuses Department to prepare an independent internal working paper and propose ToRs in light of the potential anti-competitive practices prevalent in the sugar industry at the time. Subsequently, in its meeting dated 7 August 2020, after deliberating on the findings of the working paper, the Commission independently decided to initiate an enquiry and formulate its own ToRs in order to determine whether there was a prima facie violation of sections 3 and 4 of the Act (the "Reference Enquiry").

57. Prior to the decision to initiate the Reference Enquiry, certain undertakings had filed Writ Petitions before the Islamabad High Court and Sindh High Court challenging inter alia the decision to constitute the special Sugar Inquiry Commission and all proceedings, order, letters, etc. stemming from the same. Even in the said proceedings, both the Islamabad High Court and Sindh High Court recognized the independence of regulatory/statutory bodies to exercise their discretion in consonance with their respective mandates. In this regard, the Learned Single Judge of the Honorable Islamabad High Court in PSMA and others v. Federation of Pakistan and others W.P. No. 1544/2020 (which judgement was upheld in PSMA and others v. Federation of Pakistan and others I.C.A. No. 156 of 2020) that: "

22. The Commission of Inquiry has made recommendations to the Federal Government for initiation ofproceedings under various statutes...All these statutes are self-contained legislative enactments and provide for distinct mechanisms to take cognizance and initiate proceedings. The Federal Government, at the most, can refer the matter to the concerned statutory authority for consideration. Even if it decides not to do so the respective statutory authorities cannot be restrained nor are prohibited to initiate proceedings on their own. The statutory authorities are not dependent on receiving a referral from the Federal Government ...For the sake of argument, even if the Federal Government is restrained from taking appropriate decisions in the light of the recommendations made in the Report, or the Report is quashed, would it amount to restraining respective authorities from initiating independent proceedings in accordance with the provisions of the respective statutes? I am afraid that the answer to this question is an emphatic `No '. Even if the Federal Government decides not to take any action pursuant to the recommendations made in the Report, the statutory authorities cannot be restrained from fulfilling their obligations and duties under the respective statutes. Such an eventuality is inconceivable because it would virtually amount to suspension of legislative enactments."

58. The Honourable Sindh High Court also directed in Mirpurkhas Sugar Mills Limited and 19 others v. Federation of Pakistan and others Constitional Petition No. D-3004 of 2020 (note: operation of the same has been suspended by the Honourable Supreme Court of Pakistan in terms of order dated 2 September 2020 in Federation of Pakistan and others v. Mirpurkhas Sugar Mills and others C.P. No. 2197/2020) that "the CCP, SECP and SBP to fulfil their respective mandates in accordance with law with respect to the petitioners and the Sugar Industry without reference to the impugned report or any letters sent to them in connection with the impugned report."

59. Considering the stay granted by the Honourable Supreme Court and the then general lack of clarity regarding the status of the impugned report of the Sugar Inquiry Commission, in the Commission meeting dated 7 September 2020, the Reference Enquiry was put on hold. During this whole period, the Initial Enquiry was underway. However, the C&TA Department presented another working paper recommending the amendment of the ToRs of the Initial Enquiry as new facts had come to light, pertaining to anti-competitive activities in the sugar sector, in particular, price hike, shortage of supply collective suspension of crushing activities by mills on behest of sugar mills association and non-supply to USC. The Commission, on the basis of the working paper in its stances and deemed it appropriate to amend the ToRs of the Initial Enquiry in in its meeting of 7 September 2020, took into consideration the peculiar circumstances and deemed it appropriate to amend the ToRs of the Initial Enquiry in order to determine whether there was any prima facie violation of sections 3 and/or 4 of the Act in the sugar industry.

60. Subsequently, in the Commission meeting held on 10 September 2020, a working paper was submitted by the Enquiry Committee stating that "the conduct of PSMA/sugar mills, which includes, the collective stoppage of crushing in the season 2019-20, collective rise in prices and collective refusal to supply sugar to USC appeared to be commercial decisions taken by the association, which could be a prima facie violation of section 4 of the Act." Therefore, in order to collect evidence of any communication/arrangements/decisions between PSMA/sugar mills in this regard, or any other conduct prohibited in terms of section 4 of the Act, Enquiry Committee suggested that the Commission may authorize an 'enter and search' of the premises of PSMA under section 34 of the Act. After deliberation of the same, the Commission authorized an 'enter and search' of premises in use of PSMA located in Islamabad and Lahore on 14 September 2020 for the purpose of enforcing section 4 of the Act. The Commission also authorized its officers to conduct the same and that such officers "were expressly authorized to collect, copy, and/or impound all the relevant information for the purposes of enforcing provisions of section 4 of the Act, and exercise any or all powers provided under section 34(2) of the Act."

61. Accordingly, the search and inspection of the aforementioned premises in use of PSMA was conducted on 14 September 2020. Subsequently, another working paper was submitted by the Enquiry Committee to the Commission on 22 September 2020, of "possible sharing of sensitive commercial information, i.e., pertaining to price and stocks of sugar between sugar mills." The working paper also detailed facts, which suggested that an official of the JDW Group "was nominated as the focal person for co-ordinating sugar stock position, by PSMA, in 2012 with email records showing that he is actively involved with sharing/receiving information in this regard in the intervening year." It was further stated that the compilation/consolidation of sensitive commercial information could be a prima facie violation of section 4 of the Act. The Commission via Resolution by Circulation dated 23 September 2020 observed that "reasonable grounds exist to conduct an inspection under section 34 of the Act to gather further evidence of possible collusive behaviour in violation of section 4 of the Act by sugar mills in terms of the working paper." The Commission also authorized certain officers to conduct an inspection under section 34 of the Act of the premises in use of JDW Sugar Mills Ltd. on 25 September 2020. The authorized officers were also expressly "authorized to collect, copy, and/or impound all the relevant information for the purposes of enforcing provisions of Section 4 of the Act, and exercise any or all powers provided under section 34(2) of the Act."

62. As for reliance on the supra National Feeds case, it would suffice to mention that the Honourable Supreme Court has held in CCP v. National Feed Ltd. C.Ps. Nos. 2119 to 2123 of 2016 [unreported] that "we don't think the impugned judgment could create any obstance or impediment in its way either to call for information or to inquire into any matter required to be inquired into under the Act." For ease of reference, the relevant portion is reproduced below: "A look at the concluding paragraph of the impugned judgement reveals that the hands of the Commission have not been tied. It could proceed under section 37(1) or (2) of the Act. It could also proceed under section 36 of the Act, even if no complaint in writing has been filed by an undertaking or registered association of the consumers. When the Commission can proceed under the provisions mentioned above, we don't think the impugned judgement could create any obstacle or impediment in its way either to call for information or to inquire into any matter required to be inquired into under the Act."

63. As for the objection regarding the forming of an opinion prior to initiation of proceedings under section 30 of the Act, the Enquiry Report was taken up for consideration in the Commission meeting held on 22 October 2020. After deliberating on the findings of the Enquiry Report, the Commission formed the opinion that "contraventions of Section 4 of the Act on account of PSMA and its Member-Undertakings in terms of the finding of the Enquiry Report is made out accordingly and it was resolved that in the interest of the public at large proceeding may be initiated against PSMA and its members under provisions of section 30 of the Act for prima facie violation of section 4 of the Act as per the findings of the Enquiry Report." In the given background, there was clearly a basis for initiating the Enquiry under section 37(1) of the Act and for initiation of proceedings under section 30 of the Act.

64. As for the requirement of involving the undertakings at the enquiry stage, the Commission in its previous Orders of Pakistan Poultry Association and LPGAP/JJVL has taken the position that there is no mandatory legal obligation on part of the Commission, under the Act or any subordinate legislation made thereunder, to involve undertakings at the enquiry stage. The relevant excerpt is reproduced below for ease of reference: "Linked with the above is the question whether the steps preceding the issuance of a Show Cause Notice, i.e. conduct of Enquiry in the subject proceedings was an adverse action and required compliance with principles of natural justice. As stated above, JJVL has argued that since it was not contacted during the conduct of the Enquiry therefore principles of natural justice have been violated. We deal with this question now." Natural justice has been described as a concept 'sadly lacking in precision' (as per R v. Local Govt. Board [1914] 1 KB. 160, referred to by De Smith's treatise 'Judicial Review', 6th Edition (2007) at Para 6-010). The Supreme Court of Pakistan has also held that rules of natural justice are not cast in a rigid mould and that depending upon the facts and circumstances of each case, there is no mandatory requirement of natural justice that in every case the other side must be given a notice before preliminary steps are taken. As per the Honourable Supreme Court, it might suffice if reasonable opportunity of hearing is granted to a person before an adverse action or decision is taken against him (Commissioner of Income Tax and others v. Messrs Media Network and others; 2006 PTD 2502). Support can also be gleaned from the following precedents from the UK and USA. Rees and Others; (1994) 1 All E.R. 833 at page 842-845: It was held by the Privy Council that there were many situations in which natural justice did not require that a person must be told of the complaints made against him and given a chance to answer them at the particular stage in question. Essential features leading the Courts to that conclusion had included the fact that the investigation was purely preliminary, that there would be a full 3 Read the Commission's Order available at chance adequately to deal with the complaints later, that no penalty or serious damage to reputation was inflected [sic] by proceeding to the next stage without hearing, that the statutory scheme properly construed excluded such a right to know and to reply at the earlier stage. Parry Jones v. Law Society and others; (1969) 1 Ch Division 1 at pp. 8 and 10: Held by the Court ofAppeal that where the only inquiry was as to whether there was prima facie evidence, natural justice did not require that the party should be given notice of it. ... Putting things in context, a reading of the Competition Ordinance and General Enforcement Regulations 2007 makes it clear that there is no mandatory requirement on the Commission to issue a notice/hold a hearing at the inquiry stage. Regulation 16 allows the Commission to commence an inquiry, inter alia, suo motu or in the case of a complaint. The standard to be satisfied in the latter case is if facts before it appear to constitute a contravention of sections 3, 4, 10, 11 and/or provisions of Chapter II of the Ordinance. Thus there is no requirement of notice or hearing at the stage of inquiry. Therefore it is our considered view that requirements of natural justice (a hearing) do not apply at the initiation of and during an inquiry, by the Commission. Hence in light of clear local and foreign precedents we find o merit in the assertions made in this regard. (Emphasis Added)"

65. Concerning the unconstitutionality and excessive powers granted under section 34 of the Act, we find the argument devoid of any merit and that the scope of section 34 has been misunderstood by the undertakings. In this regard, many competition agencies abroad have similar powers. For instance: the Competition Act 1998 (UK) provides the Competition Markets Authority (formerly the OFT) with powers to investigate, which enable the CMA, UK to enter business premises without a warrant. The European Commission also has similar powers to demand written information, enter premises (dawn raids) and demand company information without a warrant. Also, the authorization/decision of national competition authorities is sufficient to conduct inspections of business premises of undertakings in Belgium, Cyprus, Czech Republic, Finland, Luxembourg, Malta, Romania and Slovakia

1. The Turkish Competition Authority ("TCA") also has the power to carry out on-site inspections as per Article 15 of the Turkish Competition Act2.

66. The intention of the Legislature is clear to provide and equip the Commission with a mechanism to detect cartels and protect consumers from anti-competitive practices. The Commission powers are not unique in that similar powers have been conferred upon SECP under Part VIII of the Securities and Exchange Commission of Pakistan Act, 1997. As noted above, the search and inspection authorization letters were provided to the undertakings representatives at the time of 'enter and search' (copies of which are annexed to the Enquiry Report). These duly record the reasonable grounds for conducting such search.

67. The undertakings have also argued that, even otherwise, the Enquiry Committee could only have impounded or taken information from 'computers', hence, the impounding of mobile phones was not in conformity with the provisions of the Act and any evidence used therefrom was inadmissible. In this regard, the Act and any subordinate legislation made thereunder does not define the term 'computer'.

68. However, even when the Competition Ordinances were promulgated, smartphones were in the market and due to the ever-changing technological landscape, we find that the Competition Ordinances and the Act envisaged smartphones to fall under the term `computer' and amount to computer stored information. In this connection, Regulation 26A(2)(a) of the Competition (General Enforcement) Regulations, 2007 ("General Enforcement Regulations") specifies that: "... The Commission may for the purpose of inquiry or investigation, as the case may be, (a) admit evidence taken in the form of verifiable transcripts of tape recordings, unedited versions of video recording, electronic mail, telephone records including authenticated mobile telephone records..."

69. Even otherwise, the term 'document' has been defined in Regulation 2(1)(g) of the Ceneral Enforcement Regulations as "any matter expressed or described upon any substance by means of letters, figures or marks, or by any other means, used or intended to be used for the purpose of recording that matter". The said meaning is of wide import and refers to any material used to record any matter, hence, would also include digital forms of documentation such as e-mails, text messages, etc.

70. It is also emphasized that only the material and documents related to the instant matter were obtained from the mobile device with no leakage of any personal information. No such allegation is on record despite the passage of significant time and conclusion of arguments by the undertakings. The objective and purpose of the Digital Forensic Report by FIA is to confirm that the data has not been tampered with and that it belongs to the device impounded.

71. Internationally, many competition agencies in other jurisdictions have also evolved their digital forensics and have used even WhatsApp communication as evidence. In this regard, the TCA has employed the practice of examining personal devices and data. In the Kocak Petrol decision,2 the on-site inspection was hindered by an executive of the undertaking under scrutiny on the grounds that the laptop subject to the examination was allocated for personal use and the warrant issued by the Board did not cover such inspection. The Board decided to impose an administrative fine against the relevant undertaking, since the executive was seen to delete certain documents from the laptop, which he alleged had been personal documents, and the case handlers could not commence the on-site inspection at the time intended.3

72. The Explanatory note on the European Commission Inspections dated 11 September 2015 further explains that the inspectors "are entitled to examine any books and records related to the business, irrespective of the medium on which they are stored, and to take or obtain in any form copies of or extracts from such books or records. This includes the examination of electronic information and the taking of electronic or paper copies of such information." Clause 10 of the Explanatory Note further states that the inspectors may search the IT-environment, e.g. servers, desktop computers, laptops, tablets and other mobile devices and all storage media of the undertaking and that this applies also to private devices and media.

73. We also consider the ordinary dictionary meaning of a 'mobile device' as follows: Black's Law Dictionary: "A mobile phone with many features of a computer included in its functions". Oxford English Dictionary: "A mobile phone that performs many of the functions of a computer, typically having a touchscreen interface, internet access, and an operating system capable of running downloaded apps". Cambridge Dictionary: "A mobile phone that can be used as a small computer and that connects to the internet". Collins English Dictionary: "A mobile telephone with computer features that may enable it to interact with computerized systems, send e-mails, and access the web".

74. Considering the above definitions of a computer, we do not find any reason as to why the tablets, smartphones and other personal digital assistants (PDAs) are not to be regarded as personal computers as they are powered by microprocessors, they are programmable, they are electronic devices, they process information, they can store and transmit information and have a central processing unit (CPU).

75. Therefore, in light of the above, the Commission finds all documents, records and material obtained and attached with the Enquiry Report admissible in evidence given that all due processes and procedures were complied with and carried out accordingly. Data Obtained in accordance with section 155H of the Customs Act

76. The undertakings have argued broadly that the export data was illegally obtained from the FBR in violation of section 155H of the Customs Act and the Enquiry Committee was not delegated powers to obtain the same.

77. It is not in the Commission's purview to determine the legal obligations of the FBR under the Customs Act or to determine the scope and nature of section 155H of the Customs Act. Nevertheless, the Commission, by virtue of section 53 of the Act, can seek the assistance of any authority or agency for the performance of its functions under the Act. Moreover, the records were not made public by the Commission but only disseminated to the undertakings as a part of the Enquiry Report. Only aggregated export figures were used by the Enquiry Committee for analysis purposes.

78. Moreover, the Enquiry Committee has the power pursuant to sections 33(1)(b) and 33(a) and (b) to correspond with any authority for the purpose of collecting information in relation to an enquiry proceedings under the Act. Burden and Standard of Proof and Presumption of Innocence

79. Briefly, Counsel have argued that the Enquiry Report must establish the requisite legal standard for alleged violations of the Act. In this regard, Counsel submitted that the burden of proof is on the Enquiry Committee to establish the contraventions and the standard of proof must be that of beyond reasonable doubt. Reliance in this regard has been placed on, inter alia, Montecatini v. Commission C-235/92 P (1999) [ECJ] and Huls AG v. DSM NV Case C-199/92 P [ECJ].

80. In this regard, it is imperative to understand the nature of the Act and the Commission's objective under the Act, which is to provide for free competition in all spheres of commercial and economic activity, to enhance economic efficiency and to protect consumers from anti-competitive behavior. The Act prohibits anti-competitive behavior.

81. The nature of the Act has been succinctly described by the Honorable Lahore High Court in the supra LPG Association of Pakistan case as follows: "

51. The objective of the Act is consumer welfare that is to ensure that commercial and economic activities are free from anti-competitive behaviour. The Act also aims to ensure economic efficiency by regulating mergers and prohibiting certain agreements which may result in cartelization or allow a dominant position in the market. The purpose of the CCP is to ensure fair competition is maintained by regulating the prohibitions set out in Chapter-II. Therefore, the Act has a regulatory objective, to promote free competition and prevent anti-competitive behaviour and prescribe enforcement mechanisms to ensure compliance."

82. Secondly, the consequences of violating competition law are remedial in nature (civil) instead of being purely penal (criminal). Here, the damages will be monetary for the defendants; nobody will go to jail for colluding or committing anti-competitive practices.

83. Another regulatory scheme under the anti-dumping legislation was considered by the Honorable Islamabad High Court in Messrs Aimnaz Pvt. Ltd. v. Federation of Pakistan through the Secretary, Ministry of Law, Federal Secretariat, Islamabad and 2 others 2018 PTD 1966. In this regard, the Court cited an unreported judgement of the Division Bench of the Honorable Sindh High Court, quoting, inter alia, a portion where the Honorable Sindh High Court analyzed the nature of an anti-dumping duty imposed in violation of the relevant provisions of the Anti-Dumping Duties Act, 2015 whereby the aim of imposing the same, although a penalty, was to remove the injury caused by the concerned accused. The Honorable Islamabad High Court agreed with the said interpretation and that the duty was not a tax but "rather a form of penalty imposed to ensure that the goods are not dumped into Pakistan". The Court added that the same is a "regulatory measure or a remedial measure to protect the local industry from unfair competition because the goods are being dumped into Pakistan."

84. Therefore, applying the aforementioned reasoning of the Honorable Islamabad High Courd in the instant matter, it is re-emphasized that the purpose of imposing any penalties on undertakings for any violation of the provisions of the Act is for the sole purpose of remedying the injury in the relevant market caused by the anti-competitive conduct at issue. The same was also acknowledged by the Honorable Lahore High Court in the supra LPD Assocation of Pakistan case wherein the Court observed that "the nature of the orders and the proceedings in cases of contravention are preventive and restorative as per section 31 of the Act [Competition Act] ... the nature of the orders passed by CCP are preventive and corrective, aimed at restoring competition."

85. The Honorable Lahore High Court has also unanimously held in the supra LPG Association of Pakistan case that: "The CCP is a regulatory authority, with a regulatory objective and its purpose is not to exercise judicial power (Para 51). CCP was not established as part of the judicial hierarchy of courts nor are its function to exercise judicial power. It is established to carry out the administrative function of the executive to ensure economic efficiency and promote consumer welfare and in doing so it discharges quasi-judicial functions with the sole objective to regulate anti-competitive behavior. Although the process followed by the CCP while hearing cases must follow due process, they are not bound by the formal laws of evidence and procedure. Furthermore, the members of the CCP are not necessarily trained in law, as they require expertise in economic, commerce, finance and industry. The CCP was established under the Act, with the intent to ensure free competition and economic efficiency, so the function of hearing and deciding issues only occurs where the prohibitions have been violated, that to with the intent to restore competition in the relevant market. Hence while exercising its functions under the Act the CCP is not a 'court ' under Article 175 of the Constitution (Para 54)."

86. Counsel have relied on inter alia the cases of Montecatini and Huls stating that the presumption of innocence lies in favour of the undertakings and applies to procedures relating to infringements of the competition rules. Hence, where there is doubt as to the allegations or evidentiary proof regarding such allegation, the benefit of that doubt must be given to the undertakings accused of the infringement.

87. As elaborated upon by the United Kingdom Competition Appellate Tribunal in the case of NAPP Pharmaceutical Holdings Limited and Subsidiaries v. Director General of Fair Trading 2002 CAT 1, the principle of presumption of innocence is enshrined in Article 6(2) of the European Convention on Human Rights and Fundamental Freedoms which states that "everyone charged with a criminal offence shall be presumed innocent until proven guilty according to law." Hence, for the purpose of ECHR, due to imposition of penalties, the European Courts and the UK Courts apply the presumption of innocence in proceedings related to competition infringements. However, the UK CAT clarifies that this in no way means that the same "are to be equated with criminal proceedings... or that the rights that apply in criminal proceedings automatically apply to a case under the Act... the fact that Article 6 applies does not of itself lead to the conclusion that these proceedings must be subject to the procedures and rules that apply to the investigation and trial of offences classified as criminal offences".

88. In this regard, Counsel for Group 2 argued that the presumption of innocence was enshrined under Article 10A of the Constitution, hence, a fundamental right, the protection thereof being mandatory. Reliance was placed on the case of Muhammad Abid Farooq v. The State and another 2015 PCr.LJ

224. We find that the said case concerned a post-arrest bail matter where the Islamabad High Court applied the presumption of innocence as being the "basic and fundamental pillar of criminal law."

89. As highlighted above, the nature of the orders and penalties under the Act are remedial in nature and the Act is not a criminal statute, neither can the proceedings thereunder be categorized as purely criminal in nature. Even otherwise, as highlighted by the UK CAT, applying the principle of presumption of innocence does not mean that competition infringement proceedings before the competent forum are to be equated with criminal proceedings and that such competition related proceedings are subject to procedures and rules that apply to investigations and trial of offences classified as criminal.

90. Coming to the burden and standard of proof applicable in proceedings before the Commission, in light of the above, the Commission, being an administrative tribunal and discharging quasi-judicial functions as well as administrative functions, is not bound by the formal laws of evidence and procedure. As stated above, the nature of the Act itself and the penalties imposed are remedial in nature. Thus, the standard of proof is not one of 'beyond reasonable doubt' being the criminal standard but one of a civil standard based on the 'balance of probabilities'. In this regard, we find the supra Napp case instructive. Being the first appeal under the UK Competition Act 1998 against an infringement decision, the Court addressed the issue of burden and standard of proof, in particular, where penalties were imposed. The CAT held that: "The balance ofprobabilities is a sufficiently flexible standard to require that the Tribunal (or Director) should be more sure before finding serious allegations proved than when deciding less serious matters: per Lord Nicholls in In re H [1996] AC 563 at 586-587. The criminal standard of proof beyond reasonable doubt would not be appropriate in relation to the kind and range of issues this Tribunal has to determine under the Act. ... In our view the structure of the Act points to the conclusion that under domestic law the standard of proof we must apply in deciding whether infringements of the Chapter I or Chapter II prohibitions are proved is the civil standard, commonly known as the preponderance or balance of probabilities, notwithstanding that the civil penalties imposed may be intended by the Director to have a deterrent effect. For sake of completeness, we also refer to the following observation of the UK CAT: ... the conclusion we reach is that, formally speaking, the standard of proof in proceedings under the Act involving penalties is the civil standard of proof, but that standard is to be applied bearing in mind that infringements of the Act are serious matters attracting severe financial penalties..."

91. Regarding Montecatini and Huls cited by Counsel, selective reliance has been placed on the same. Briefly, both cases dealt with undertakings that were participants in an agreement and concerted practice by which producers supplying polypropylene in the territory of the EEC inter alia contacted each other and met regularly in a series of secret meeting to discuss and determine commercial policies, set target/min prices for sale of product, allocating each producer an annual sales target or quota and agreed to various measures to facilitate the implementation of such target prices such as temporary restrictions on output, exchange of information on their deliveries, etc. The ECJ held that in the field of competition law, where there is a dispute as to the existence of an infringement, it is for the European Commission to prove the infringements found by it and to adduce evidence capable of demonstrating to the requisite legal standard the existence of the circumstances constituting an infringement. However, the ECJ has not elaborated what the requisite legal standard ought be.

92. As discussed above, the standard is the civil standard based on the 'balance of probabilities'. Furthermore, we understand that the ECJ refers to the European Commission proving the infringements after the conclusion of the administrative proceedings. Moreover, the European Commission agrees that the burden of proof is on the European Commission to establish liability when passing an order. However, we find that during administrative proceedings, the burden of proof is rebuttable as it follows from the ECJ's observation in the supra Huls case that: "Since the Commission was able to establish that Huls had participated in meetings between undertakings of a manifestly anti-competitive nature, it was for Huls to put forward evidence to establish that its participation in those meetings was without any anti-competitive intention by demonstrating that it had indicated to its competitors that it was participating in those meetings in a spirit that was different from theirs."

93. Therefore, it follows that the undertakings must adduce evidence, which could rebut the findings on which the Commission or the Enquiry Committee forms the basis for its conclusions concerning the alleged anti-competitive conduct. It is settled law that undertakings must put forward arguments which cast the facts established by the Commission in a different light, allowing another plausible explanation. In this regard, it may be helpful to refer to the case of AC-Treuhand AG v. European Commission Case T-27/10 (upheld by the ECJ in Case C494/14 P), wherein the European Commission's decision was contested pertaining to a number of undertakings infringing Article 81 EC by participating in two sets of anti-competitive agreements and concerted practices covering the EEA and relating to, first, the in stabilizers sector and, second, the epoxidized soybean oil and esters sector. Each of those infringements consisted of price fixing, allocation of markets through sales quotas, allocation of customers and exchange of commercially sensitive information, in particular on customers, production and sales. The General Court held that: "Likewise, when the Commission relies on evidence which is in principle sufficient to demonstrate the existence of the infringement, it is not sufficient for the undertaking concerned to raise the possibility that a circumstance arose which might affect the probative value of that evidence in order for the Commission to bear the burden of proving that that circumstance was not capable of affecting its probative value. On the contrary, except in cases where such proof could not be provided by the undertaking concerned because of the conduct of the Commission itself, it is for the undertaking concerned to prove to the requisite legal standard, first, the existence of the circumstance relied on by it and, second, that that circumstance calls into question the probative value of the evidence relied on by the Commission."

94. We also find the case of T-Mobile Netherlands BV v. Raad van bestuur van de Naderlandse Mededingingsautoriteit (Netherlands Competition Authority) Case C 8/08 instructive in this regard, wherein it has been held that: "The concept of a concerted practice, as it derives from the actual terms of that provision, implies, in addition to the participating undertakings concerting with each other, subsequent conduct on the market and a relationship of cause and effect between the two. Subject to proof to the contrary, which the economic operators concerned must adduce, it must be presumed that the undertakings taking part in the concerted action and remaining active on the market take account of the information exchanged with their competitors in determining their conduct on that market. That is all the more the case where the undertakings concert together on a regular basis over a long period... ... Where it can be established that such undertakings successfully concerted with one another and remained active on th market, they may justifiably be called upon to adduce evidence that that concerted action did not not have any effect on their conduct on the market in question."

95. Moreover, as held by the UK CAT in the supra NAPP case, although the persuasive burden of proof is on the Director (OFT), it does not preclude the Director, in discharging the burden of proof, from relying, in certain circumstances, "from interences of presumptions that would, in the absence of any countervailing indications, normally flow from a given set of facts, for example... an undertaking's presence at a meeting with a manifestly anti-competitive purpose implies, in the absence of explanation, participation in the cartel alleged... Presumptions of this kind simply reflect inferences that can, in normal circumstances, be drawn from the evidence: they do not reverse the burden of proof.."

96. Also, in the supra case of AC-Treuhand, it was held by the General Court that: "59 It must also be taken into consideration that since the prohibition on participating in anti-competitive practices and agreements and the penalties which offenders may incur are well known, it is normal for the activities which those practices and those agreements entail to take place in a clandestine fashion... and for the associated documentation to be reduced to a minimum. 60 Furthermore, even if the Commission discovers evidence explicitly showing unlawful contact between traders, such as the minutes of a meeting, it will normally be only fragmentary and sparse, so that it is often necessary to reconstitute certain details by inferences. 61 Accordingly, in most cases, the existence of an anti-competitive practice or agreement must be inferred from a number of coincidences and indicia which, taken together, may, in the absence of another plausible explanation, constitute evidence of an infringement of the competition rules. 62 According to the case-law, moreover, if there is no evidence directly establishing the full duration of an infringement, the Commission should adduce, at the least, evidence of facts sufficiently proximate in time for it to be reasonable to accept that that infringement continued uninterruptedly between two specific dates. 63 The Court of Justice has also held that, where the Commission has been able to establish that an undertaking had taken part in meetings between undertakings of a manifestly anti-competitive nature, the General Court was entitled to consider that it was for that undertaking to provide another explanation of the tenor of those meetings. In taking that approach, the General Court did not unduly reverse the burden of proof and did not breach the presumption of innocence."

97. Therefore it must be borne in mind, in light of the above jurisprudence, that in discharging the burden of proof, the Commission can rely on inferences or presumptions that, in the absence of any countervailing indications, normally flow from a given set of facts and, in this connection, the existence of the anti-competitive practice or agreement must be inferred from a number of coincidences and indicia. Thus, attention must be given to the scheme/pattern emerging/surfacing from all the given set of facts of a case including all the documents and submissions on record.

98. Moreover, as recognized by the ECJ and the UK CAT, it is normal for the activities related to anti-competitive practices and agreements to take place in a clandestine fashion and for documentation to be reduced to a minimum. Even if evidence is discovered, it will normally be only fragmentary and sparse so that it is often necessary to reconstitute certain details by inferences. Hence, even if there were fragmentary evidence attached to the Enquiry Report, as alleged by the Undertakings, it would be normal for a cartel like arrangement. The Commission must consider not only the findings of the Enquiry Report, but submissions and documents put on record by the undertakings and whether the alleged anti-competitive conduct has the object or effect of preventing or reducing competition in the relevant market.

99. Also, in the supra T-Mobile case, it was held that "... the number, frequency, and form of meetings between competitors needed to concert their market conduct depend on both the subject-matter of that concerted action and the particular market conditions... what matters is not so much the number of meetings held between the participating undertakings as whether the meeting or meetings which took place afforded them the opportunity to take account of the information exchanged with their competitors in order to determine their conduct on the market in question and knowingly substitute practical cooperation between them for the risks of competition... In so far as the undertaking participating in the concerted action remains active on the market in question, there is a presumption of a causal connection between the concerted practice and the conduct of the undertaking on that market, even if the concerted action is the result of a meeting held by the participating undertakings on a single occasion."

100. Therefore, we are not persuaded by the fragmentary evidence argument proffered by the undertakings and are in agreement that even if the alleged anti-competitive conduct is the result of a single meeting or a single occasion, it would be sufficient to find a prohibited agreement for the purposes of section 4 of the Act. Definition of Relevant Market and Spill-over Effect

101. Briefly, Counsel argued that the determination of relevant geographical market as the whole of Pakistan is erroneous due to the following factors: i. The observation of the Enquiry Committee in the Enquiry Report relating to the fact that "the matter at hand pertains to prima facie anti-competitive activities by an association of undertakings covered under section 4 of the Act, the delineation of relevant market is for reference purposes only" is incorrect as the wording of section 4 of the Act requires a relevant market to be defined. ii. The regulatory environment is not homogenous in the whole of Pakistan as there are differences of policy and laws. Attention of the Commission, in this regard, was drawn to the Punjab Sugar Factories (Control) Amendment Ordinance, 2020 which has made material changes to the regulatory environment as well as inter provincial barriers to trade, in particular, between Punjab and Sindh, hence, imposing restrictions on the free inter provincial movement of sugar. iii. Sugar is sold by the mills on an ex-mill basis and the title/ownership of sugar produced is transferred at the factory gate. Hence, the relevant market should be restricted to the location of mills.

102. As held by the Commission in its previous orders and observed in the Enquiry Report, we find merit in the argument that defining the 'relevant market' is not essential for the application of section 4 of the Act. Under section 4, the emphasis is on the restrictive activity or prohibition being carried out through, inter alia, the form of an 'agreement', which may have the object of "preventing, restricting or reducing" competition. In this regard, we refer to the Commission's order in the matter of Amin Brothers Engineering et al4 (the "PESCO Order"), wherein it was held that: "...the rationale behind having a relevant market when dealing with competition issues must be kept in mind. In competition law, distinction must be made between unilateral anti-competitive conduct (abuse of dominance in section 3 cases) and multilateral anti-competitive conduct (collusion in Section 4 cases)... in cases of collusion, market power is irrelevant. What is relevant is the agreement to collude. Therefore, the identification of a relevant market in cases of collusion is merely for the purposes of reference, and is not a requirement for establishing an anti-competitive action."

103. As focus is more on the prohibited conduct, the definition of 'relevant market' under Section 4 is for reference purposes. In particular, in cases where the very object of the prohibited conduct is deemed anti-competitive and the nature of the challenged restraint has the tendency to harm competition, there is no need to assess market definition or evidence of actual competitive harm

5. In this regard, we find the judgement of the US Supreme Court in FTC v. Indiana Federation of Dentists 476 US 447 (1986) instructive, wherein the association claimed that the decision of the FTC was wrong as matter of law because the FTC had not defined the relevant market. The Supreme Court held that a restriction requires some competitive justification even in the absence of a detailed market analysis and that the purpose of the inquiries into market definition and market power is to determine whether an arrangement has the potential for genuine adverse effects on competition. However, the Court ruled that the finding of such adverse effects obviated the need for an inquiry into market power, which it termed as a mere "surrogate for detrimental effects".

104. In any case, the issue in the instant proceedings is not whether or not the relevant market has been defined, as the Enquiry Report has indeed defined the same, but whether the same has been correctly defined as argued by Counsel on behalf of the undertakings, which we take up below.

105. In this regard, the relevant market has been defined under section 2(1)(k) of the Act: "The market which shall be determined by the Commission with reference to a product market and a geographic market and a product market comprises of all those products or services which are regarded as interchangeable or substitutable by the consumers by reason of the products' characteristics, prices and intended uses. A geographic market comprises the area in which the undertakings concerned are involved in the supply of products or services and in which the competition are sufficiently homogenous and which can be distinguished from neighboring geographic areas because, in particular, the conditions of competition are appreciable differing in those areas".

106. As seen above, emphasis is placed on conditions of competition being 'sufficiently homogenous' and not strictly homogenous. We believe that, in essence, the laws governing the sugar supply chain for Punjab, Sindh and KPK, during the enquiry period serve the same purpose and function with regard to, inter alia, fixing the minimum support price of sugarcane, having control over retail prices of sugar, designation of reserved areas for purchase of sugarcane, announcing the start of the crushing season and prevention of hoarding of sugar. Hence, such applicable laws, rules and regulations have the same impact on the sugar industry regardless of geographic locality.

107. The homogeneity of the product finds support from the fact that there is only one 'Sugar Advisory Board' where representatives of the mills, farmers, Provincial Governments and the Federation are members and collectively decide on policies as well as address concerns facing the sugar industry as a whole regardless of any provincial boundaries or locality. The ToRs of the SAB (reproduced below) including the rationalization of sugarcane cess across provinces clearly evidences the same.

108. In this regard, we find the ECJ decision in Case 27/76 United Brands Company and United Brands Continentaal BV v. Commission [1978] ECR 207 instructive, wherein the ECJ upheld the European Commission's decision in that UBC had abused its dominant position in the banana market in a number of ways. The applicant had challanged the definition of 'relevant market stating, inter alia, that there are seasonal and geographic fluctuations, the German market was in a more privileged position and that there existed three substantially different systems of customs duty in such areas, hence, it was impossible to treat the market considered by the European Commission as a single territorial market. Other factors alleging the differentiation the geographical markets were the size, consumer habits and market concentration. The ECJ held that the six States forming the relevant geographical market were "markets which are completely free, although the applicable tariff provisions and transport costs are of necessity different but not discriminatory, and in which the conditions of competition are the same for all... From the standpoint of being able to engage in free competition these six States form an area which is sufficiently homogeneous to be considered in its entirety."

109. In Case T-229/94 Deutsche Balm AG v. Commission [1997] ECR 11-1689, which case pertained to inter alia an infringement of Article 86 of the Treaty, the applicant argued that the European Commission had wrongly defined the relevant market. The geographic market was the whole of Germany. The ECJ held that: "

92. In as much as the applicant submits that the Commission's definition of the geographical market is undermined by the difference in the competitive situation, it is sufficient to state that the definition of the geographical market does not require the objective conditions of competition between traders to be perfectly homogeneous. It is sufficient if they are 'similar' or 'sufficiently homogeneous' and, accordingly, only areas in which the objective conditions of competition are 'heterogenous' may not be considered to constitute a uniform market."

110. Moreover, with regard to the title of sugar being transferred at ex-mill and the location of the relevant market being restricted to just the mill area, we are of the opinion that this argument is devoid of any merit. As admitted by one of the undertakings (Omni Group) before this Bench, Punjab has surplus sugarcane production and no control over borders, therefore, sugarcane is transported to Sindh for crushing. Whereas, sugar crushed in Sindh is transported to Punjab because Sindh generally has surplus sugar above its requirement

6. This clearly demonstrates that mills have customers in the relevant market.

111. Furthermore, large buyers and industrial/commercial consumers purchase sugar directly from the mills. Sugar wholesalers can either purchase directly from the mills or through the mill's designated broker(s) who work on a commission basis. Wholesalers can then sell sugar onwards to sub-dealers or directly to retailers. In a competitive market, mills compete with each other for business based on price and wholesalers/commercial consumers lift sugar from the mill offering the most competitive prices. In light of the above, it is clear the sugar and sugarcane move freely throughout the relevant market and are not restricted to one geographical location and sugar produced by a single mill can be sold throughout the relevant market.

112. It is clear from the foregoing that the definition of relevant market as stated in the Enquiry Report is not erroneous. A similar argument was also raised in the Matter of PSMA (File No. 3(27)/ Reg/Sugar/CCP/2009) (Order Dated July 2010), where the Commission also found that PSMA had failed to point out how the regulatory environment was different across four provinces. Moreover, the undertakings have put forward a news clipping published on The News dated 3 September 2020 as evidence that Punjab bans sugar transport to Sindh and Balochistan. No proper notification or any other applicable legal instrument has been provided by the undertakings. Reliance cannot be placed on the said news clipping as it appears contradictory in nature as it is admitted in the news clipping that the "Punjab Food Secretary Asad Gilani said no major quantity was stopped from being transported to Sindh and Balochistan. It will be around 15 to 20 trucks only... Sources said inter provincial movement was stopped on the NH but no such activities were reported on Motorway entry points." Hence, even otherwise, any restriction in inter provincial movement of sugar was only temporary and selective in nature and does not alter the impact for proposes of the present issue/context.

113. Counsel also argued that the requirements of showing the spill-over effect as per the Honourable Lahore High Court Judgment in the supra LPG Association case have not been fulfilled in the SCNs. In this regard, it has been argued that the analysis does not contain the reasons disclosing that the effect of anti-competitive behaviour is spilling over territorial limits of respective Provinces.

114. In economic terms, a spill-over is defined as: "A connection between different parts of the economy. Spill-overs may be pecuniary or non-pecuniary. A pecuniary spill-over occurs, for example, when changes in one industry affect factor supplies to another "7 "'Spillover Effect' is an economic term, used for positive or negative effect of an economic activity, causing benefit without paying or suffer without compensation. It is also termed as externality or neighbourhood effect. (LPG Association of Pakistan v. Federation of Pakistan and others (and connected writ petitions) case, para I. 7, pg 93". "Externalities refers to situations when the effect of production or consumption of goods and services imposes costs or benefits on others which are not reflected in the prices charged for the goods and services being provided. Pollution is an obvious example of a negative externality, also termed an external diseconomy. Chemicals dumped by an industrial plant into a lake may kill fish and plant life and affect the livelihood of fishermen and farmers nearby. In contrast, a positive externality or external economy may arise from the construction of a road which opens a new area for housing, commercial development, tourism, etc". (Glossary of Industrial Economics and Competition Law, OECD).

115. Essential commodities like sugar and flour are likely to have wide ranging spill-over effects due to following reasons: i. Composite Demand, which refers to goods, services or commodities, which have several/different uses. The concept is more significant when considering demand for essential commodities with multiple uses. For example, sugar is used by several/different industries such as beverages, confectionary, restaurants and pharmaceuticals. A rise in price of sugar will lead to rise in costs for products produced by each of these industries. ii. Important components in the consumer basket of goods with widespread consumption by every household.

116. In the instant matter, we are of the opinion that the requirement of spill-over effect has been adequately addressed in the definition of the relevant market and Sector Review section in the Enquiry Report, which has been incorporated by reference in the SCNs. Even otherwise, it may be relevant to add that the Commission received the attested copy of the LHC judgement on 30 November 2020, whereas, the enquiry was concluded on 21 October 2020 and the SCNs were issued on 4, 5 and 6 November 2020 respectively.

117. As also highlighted above, it is clear that inter provincial movement of sugar takes place and that there can be no legal bar of movement of essential commodities by the Provinces in accordance with Article 151 of the Constitution except in certain specific circumstances such as Provincial Governments may resort to temporary bans in light of domestic shortages.

118. The spill-over effect is also evident from the calculation of sugar consumption figures and production statistics of sugar and sugarcane. For instance, as specified in the Enquiry Report,8 Punjab and Sindh are the primary sugar producing regions and sugar production figures presented in Table 10 of the Enquiry Report show that 63% of sugar is produced in Punjab, 30% in Sindh, 7% in KPK and no sugarcane or sugar is produced in Balochistan. However, the national demand for sugar on the other hand is calculated on the basis of the overall consumption in the country, which is approx. 25kg per capita per-year,9 regardless of territorial boundaries. It is not plausible for any one Province to meet this national demand as even Punjab only produces 63% of sugar. Moreover, certain Provinces such as KPK and Balochistan are sugar deficit regions relying on sugar supply from other Provinces to meet their requirements. Hence, there is clearly provincial movement of sugar from Punjab and Sindh to other Provinces.

119. Importantly, by virtue of being an essential commodity, we are more likely to observe significant spill-over effects. In this regard, the Schedule to the 'Price Control and Prevention of Profiteering and Hoarding Act, 1977 (the "Hoarding Act") contains 53 items listed as essential which includes inter alia: sugar, fruits and vegetables, wheat flour and other food products as well as non-food products such as fertilizers, tractors and cement. Products especially foodstuffs are deemed essential due to their wide range consumption amongst the general populace. We believe that the spill-over effect is evident to occur or is more pronounced where goods classified as essential commodities are involved due to (i) their wide consumption and (ii) their usage as inputs for other industries. In this regard, we take note of the Honourable Lahore High Court's observation in its order dated 2 April 2021 in the case of Munir Ahmad v. Government of Pakistan and others W.P. No. 3834/2020 that "The issue before this Court is of price control and fixation of basic commodities... particularly, when different prices of any essential commodity like Wheat or Sugar is fixed differently by the Provinces, necessary consequence of which is that Wheat or Sugar are transported to the Province where the price is high, which makes this issue as trans-provincial."

120. Hence, it is clear that the instant matter transcends provincial boundaries and is of national import. The product is essentially homogenous. The laws primarily of all provinces are substantively similar and no particular provision has been highlighted by the parties concerned in this regard. Miscellaneous Applications filed by Certain Undertakings

121. Before coming to the analysis on the law and Issues framed above, we consider and dispose of the miscellaneous applications filed by Counsel on behalf of the Group 5 Undertakings (see facts narrated above), being frivolous and without merit and/or without any legal basis. As the applications are identical in nature, we shall deal with them collectively. The appeal provision in section 41 of the Act provides an opportunity of appeal for undertakings aggrieved by any order made by a Member or authorized officer of the Commission. Any decision/order made by two or more Members can be appealed before the CAT by virtue of section 42 of the Act. Hence, constitution of a larger Bench of the Commission of two or more Members does not deprive any undertaking of its right of appeal. Moreover, the scope and nature of the enquiry and the subject matter and decision of the 2010 PSMA Order were entirely different from the instant proceedings, hence, no conflict of interest arises. D. LAW PERTAINING TO SECTION 4 VIOLATIONS - INTERNATIONAL (EU) AND DOMESTIC JURISDICTIONS - CONCEPT OF 'CONCERTED PRACTICE' AND DECISION OF AN UNDERTAKING

122. The alleged violations pertain to section 4 of the Act. In the instant proceedings, there has been great debate on the application of section 4 in relation to decisions/agreements between PSMA and its member undertakings (it has been argued that there is no decision/ agreement for the purpose of section 4). Hence, there can be no implementation of the same or any that participation of the undertakings in any concerted practice and there is no concurrence of wills, meeting of the minds or joint intention. Hence, such alleged conduct does not fall within the scope and ambit of Section 4 of the Act.

123. At the outset, the Commission seeks to clarify the application of section 4 of the Act and principles in relation thereto. Briefly, none of the undertakings have contested that they do not fall within the definition of 'undertaking' under section 2(1)(q) of the Act. In this regard, the Commission finds that each undertaking is a body corporate engaged in the 'production, supply, distribution of goods' and includes the association of undertakings, i.e., PSMA.

124. Section 4 of the Act is in congruity with Article 101 of the Treaty on the Functioning of the European Union (the "Treaty") (formerly Article 81 of the EC Treaty). The European Commission has categorized prohibited conduct under Article 101 of the Treaty as either being in the form of an 'agreement' or a 'concerted practice'. The UK Competition Markets Authority ("CMA") in the Tobacco Manufacturers Case No. CA98/01/2010/Case CE/2596-03, aptly summarized the principles enunciated by the European Commission, General Court and ECJ decisions on the matter and their application on UK competition law infringements as follows: "An agreement does not have to be a formal written agreement to be covered by the Chapter I Prohibition. It may be constituted simply by way of an 'understanding, even where there is nothing to prevent either party going back on, or disregarding, the understanding. The Chapter I Prohibition is intended to catch a wide range of agreements, including oral agreements and 'gentlemen's agreements' as, by their nature, anti-competitive agreements are rarely in written form. There is no requirement for an agreement to be legally binding, or for it to contain any enforcement mechanisms. An agreement may be express or inferred from conduct of the parties, including conduct that appears to be unilateral. An agreement may consist not only of an isolated act, but also of a series of acts or a course of conduct. As held by the General Court, for an agreement to exist: '[I]t is sufficient if the undertakings have expressed their joint intention to conduct themselves on the market in a specific way'." An agreement within the meaning of the Chapter I Prohibition exists in circumstances in which there is a concurrence of wills, in that a group of undertakings intend to adhere to a common plan that limits, or is likely to limit, their commercial freedom by determining the lines of their mutual action, or abstention from action. Although it is essential to show the existence of a joint intention to act on the market in a specific way in accordance with the terms of the agreement, it is not necessary to establish a joint intention to pursue an anti-competitive aim as such. The form in which the parties' intention to behave on the market is expressed is irrelevant. An agreement can also come into existence through tacit acquiescence. Tacit acquiescence requires an express or implied 'invitation'from one party to the other party to fulfil an anti-competitive goal 'jointly, which may be inferred from conduct. The fact that a party does not abide fully by an agreement which is anti-competitive, does not relieve that party of responsibility for it. A concerted practice does not require an actual agreement (whether express or implied) to have been reached... Rather, as the ECJ held... the object is to bring within the prohibition of that Article [101] a form of coordination between undertakings which, without having reached the stage where an agreement properly so called has been concluded, knowingly substitutes practical co-operation between them for the risks of competition. The concept of a concerted practice must be understood in light of the principle that each economic operator must determine independently the policy it intends to adopt on the market.

125. It has further been held by the ECJ, as relied upon by the CMA in the supra Tobacco Manufacturers case that: "It is not necessary, for the purpose of finding an infringement, to characterize conduct exclusively as an agreement or as a concerted practice. The concepts of agreement and concerted practice are not mutually exclusive and there is no rigid dividing line between the two. They are intended: 'to catch forms of collusion having the same nature and are only distinguishable from each other by their intensity and the forms in which they manifest themselves."

126. In the supra case of T-Mobile, it has also been held by the ECJ that" "With regard to the assessment as to whether a concerted practice is anti-competitive, close regard must be paid in particular to the objectives which it is intended to attain and to its economic and legal context. ...in order for a concerted practice to be regarded as having an anti-competitive object, it is sufficient that it has the potential to have a negative impact on competition. In other words, the concerted practice must simply be capable in an individual case, having regard to the specific legal and economic context, of resulting in the prevention, restriction or distortion of competition within the common market."

127. With regard to 'decisions by an association of undertaking', the European Commission, the General Court and/or the ECJ generally deduce whether the object or effect of the decision, regardless of its form, influences or coordinates the conduct of the members of the association. Through jurisprudence developed in that part of the world, the decisions by associations of undertakings, in particular, pertaining to information exchange, exist in different forms such as letters, orders, instructions, protocols, forecasts, recommendations, verifications, etc. In fact, in Re Nuovo CEGAM, 1984, OJ L 99/29, CMLR 484, the European Commission initiated the case as a result of an investigation into the insurance industry where the object of the foundation of the Italian association of engineering insurers and the effect of its activities was prima facie found to be to restrict or distort competition within the common market for the class of insurance concerned. The European Commission found that the founding documents of the Association constituted an "agreement between undertakings and the activities of the Association are based on decisions by its organs, which constitute decisions by an association of undertakings." Mere recommendations by associations with no binding effect have also been held to be a 'decision' by the ECJ10.

128. In this regard, coming to the application of section 4 of the Act, the Commission has held in its earlier orders, in particular, the Pakistan Jute Mills Association and its Member Mills Order dated 3 February 2011 "that the term agreement used in section 4 of the Act has a very wide scope. As per the definition given in section 2(1)(b) of the Act, the term agreement can refer to any arrangement, understanding or practice." In this regard, the Commission has held that, due to the wide scope of the said definition, an agreement can take a variety of forms and "does not have to conform to the usual notion of a standardized written, binding or legally enforceable instrument. In line with this definition, a practice that has continued over a period of time in a particular market or industry qualifies to be an "agreement" and such an agreement can be scrutinized by the Commission."

129. With tegard to the term 'decision', the Commission in the supra Pakistan Jute Mills case, elaborated the scope of the term broadly, applying the wide interpretation developed in the EU, as stated above, where even rules, recommendations and co-ordination of an association falls within the purview of the same. In this regard, the Commission placed reliance on the cases of V/27.958 National Sulphuric Acid Association [80/917/EEC], where the rules adopted by the said association were decisions of that association and the case of C-96/82 IAZ International Belgium NV v. Commission [1983] ECR 3369 where, with regard to the activities of an association named `Anseau', it was held: "

19. In the first place, Anseau observes that there can be no question of an `agreement between undertakings' within the meaning of the above-mentioned provision. Anseau is an association of undertakings which does not itself carry on any economic activity. Article 85(1) of the Treaty is therefore applicable to it only in so far as its member undertakings are legally bound by the agreement. In fact they are not since, under both the agreement and the statutes of Anseau, the latter is empowered only to make recommendations.

20. As the court has already held... Article 85(1) of the Treaty applies also to associations of undertakings in so far as their own activities or those of the undertakings affiliated to them are calculated to produce the results which it aims to suppress. It is clear particularly from the latter judgment that a recommendation, even if it has no binding effect, cannot escape Article 85(1) where compliance with the recommendation by the undertakings to which it is addressed has an appreciable influence on competition in the market in question."

130. The Commission has also held, inter alia, in its previous orders that: i. A decision of an association reflects an understanding between the member undertakings of an association and, if implemented/acted upon by the member undertakings, results in an agreement between the association and the member undertakings.11 ii. By being a member of an association, an undertaking is deemed to have accepted its constitution and to have empowered the association to undertake obligations on its behalf. Consequently, even where a member has not expressly approved an anti-competitive agreement concluded by the association but has not expressly opposed it, the member may be held to have acquiesced to the agreement. (emphasis added).12 iii. The prohibition contained in section 4 of the Act pertains to 'entering' into a prohibited agreement and the implementation of the same is not required to be established for the purposes of violation being committed (emphasis added)13. iv. The term 'agreement' as conceived under the Act is very broad and encompasses the 'entering into' any/or all practices, arrangements and understandings that come within the purview of section 4(1) of the Act. When this section is read with the definition of 'agreement' in the Act contractual elements like offer and acceptance, free consensus of parties, lawful consideration or for that matter enforceability of the agreement itself, are not relevant factors in determining the fact whether any 'agreement' has been entered into. The prohibition under section 4 of the Act pertains to all agreements whether these are: legally enforceable or not, with or without consideration or entered voluntarily or involuntarily14.

131. Therefore, we fail to understand the selective reliance placed on the case in the Matter of Pakistan Automobile Manufacturers Authorized Dealers Association (PAMADA) and its Member Undertakings 2016 CLD 289 as well as the Commission's Banks Order that in order for member undertakings of an association to be held liable, 'decisions' must be implemented. The selective reliance by Counsel on the excerpt in the Bank's Order fails to appreciate the context that, in that particular case, the decision of the association was acted out and therefore, there was no doubt as to the existence of an agreement. It was not stated as a pre-requisite of an 'agreement'. To the contrary, the Commission determined that the term 'agreement' has a very wide scope. While the Commission in PAMADA cited the excerpt from the Bank's Order, they decided on the basis that the member undertakings had established their independence and non- adherence with respect to the price fixing decision. As for reliance on the Dole case, we will discuss it in Part E below.

132. As stated above, besides the term agreement having a very wide import, the Commission in its decision of All Pakistan Cement Manufacturers Association also observed that the emphasis under the Act is 'entering into' an agreement not implementation of the same. In this regard, we find the case of Case T-6/89 Enichem Anic v. European Commission instructive where the General Court observed, in paragraph 113 thereto, that the European Commission was not able to obtain any proof of the applicant's implementation of the price initiatives, however, that did not in any way impugn the finding that the applicant participated in those initiatives.

133. In the above legal context, we shall now proceed to determine on the main issues in greater detail, whether the undertakings are in violation of section 4 of the Act and whether each alleged prohibited conduct amounts to an 'agreement' for the purposes of Section

4. E. ISSUE I - EXCHANGE OF COMMERCIALLY SENSITIVE INFORMATION

134. In summation, based on the findings of paragraphs 93-111 of the Enquiry Report, it is stated that since 2012 onwards, the platform of PSMA is being used by its member mills in Punjab zone to share stock information amongst themselves, which has also been considered by the Enquiry Committee to be sensitive commercial information and that the same has a direct bearing on the current and future price of sugar. Such information, the Enquiry Committee maintains is used to control prices and restrict and distort competition in the relevant market and is a prima facie violation of section 4(1) read with section 4(2)(a) of the Act. As will be discussed in further detail below under Part F, the Enquiry Report also found that all undertakings also exchanged commercially sensitive information as a part of a broader cartel arrangement/agreement to pre-determine export quantities, with the result of controlling supplies. We find that this information sharing is pursuant to the decision of PSMA as also pointed out in the Enquiry Report.

135. In this regard, Counsel have, inter alia, argued that: i. The context in which stock positions in Pakistan are shared between the undertakings has been ignored i.e. SAB asks for data regarding production, sales etc. Furthermore, the Federal Government itself seeks, solicits and demands input of PSMA as well as other stakeholders on the sugar stock and availability position, which in turn is used to form an opinion on the amount of exports/imports allowed. ii. The information shared is not 'commercially sensitive' as the same is easily accessible public information as it is also collected by the Provincial Cane Commissioners. iii. The 'Dole Test' referred to by the Commission in its previous orders is inapplicable in this regard due to various factors including that there is no stability in the sugar industry. iv. A rule of reason approach should be adopted instead of finding the same to be by object restrictive of competition. v. The same does not amount to a 'decision' by PSMA or an 'agreement' between Undertalcings.

136. Before coming to the relevant facts in the instant matter and the arguments raised by Counsel on behalf of the undertakings, it is important to state the principles laid down on information exchanges between competitors.

137. According to the OECD's Policy Roundtables on "Information Exchanges between Competitors under Competition Law" (2010) (the "Information Exchange Policy Roundtable"), generally, information exchanges among competitors may fall into three different scenarios under competition rules: i. "as a part of a wider price fixing or market sharing agreement whereby the exchange of information functions as a facilitating factor; ii. in the context of broader efficiency enhancing cooperation agreements such as joint venture, standardization or R&D agreements; or iii. as a stand-alone practice, whereby the exchange of information is the only cooperation among competitors."

138. It has also widely been regarded by competition agencies, as stated in the Information Exchange Policy Roundtable that the exchange of information can facilitate collusion among competitors by allowing them to establish coordination, monitor adherence to coordinated behavior and effectively punish any deviations. While assessing the legality of information exchanges, competition agencies take into account the structure of the affected market and levels of concentration, characteristics/nature of the information exchanged and the modalities in which the information exchange takes place.

139. There are generally two approaches to the legal assessment of information exchanges, which varies from jurisdiction to jurisdiction. Harmful information exchanges are considered to be a part of a broader cartel agreement. What is important is that an agreement/arrangement must exist to constitute a violation and that information sharing is not an isolated act. This practice can be seen prevalent in USA and India in light of several judgments by the appropriate forum in relation to information exchanges between competitors. However, the US Supreme Court has also acknowledged in United States v. Container Corp., 393 U.S. 333 (1969) that where each appellee, upon request by a competitor, would furnish information as to the most recent price charged or quoted to individual customers, with the expectation of reciprocity and with the understanding that it represented the price currently being bid, that although there was no agreement in place to adhere to a pricing schedule, there was an exchange of information concerning specific sales to identified customers and current prices. Hence, a concerted action, which was considered sufficient to establish the combination orconspiracy, the initial ingredient of a violation of section 1 of the Sherman Act.

140. Another approach towards information exchanges, prevalent in the European Union, not only at Community level but also in most Member States at the national level, is that concerted practice is sufficient, where collusion is sanctioned within the context of information exchanges. In this regard, according to the Guidelines on the Applicability of Article 101 of the Treaty on the Functioning of the European Union to Horizontal Co-operation Agreements (the "Article 101 Guidelines"), section 2 relates to the general principles on the competitive assessment of information exchanges as laid down in Community decisions, in particular, the ECJ. The said provision acknowledges that data can be exchanged either directly between competitors or indirectly through a common agency such as a trade association or another third party such as a market research organization.

141. The Article 101 Guidelines describe information exchanges as "agreements, decisions by associations of undertakings, or concerted practices under which information is exchanged, where the main economic function lies in the exchange of information itself.15 The said Guidelines acknowledge that the exchange of market information may lead to "restrictions of competition in particular in situations where it is liable to enable undertakings to be aware of market strategies of their competitors. The competitive outcome of information exchange depends on the characteristics of the market in which it takes place (such as concentration, transparency, stability, symmetry, complexity etc.) as well as on the type of information that is exchanged, which may modify the relevant market environment towards one liable to coordination16".

142. The Article 101 Guidelines further state that: "

60. Information exchange can only be addressed under Article 101 if it establishes or is part of an agreement, a concerted practice or a decision by an association of undertakings...

61. This [information exchanges] does not deprive companies of the right to adapt themselves intelligently to the existing or anticipated conduct of their competitors. It does, however, preclude any direct or indirect contact between competitors, the object or effect ofwhich is to create conditions of competition which do not correspond to the normal competitive conditions of the market in question, regard being had to the nature of the products or services offered, the size and number of the undertakings, and the volume of the said market. This precludes any direct or indirect contact between competitors, the object or effect of which is to influence conduct on the market of an actual or potential competitor, or to disclose to such competitor the course of conduct which they themselves have decided to adopt or contemplate adopting on the market, thereby facilitating a collusive outcome on the market. Hence, information exchange can constitute a concerted practice if it reduces strategic uncertainty... Consequently, sharing of strategic data between competitors amounts to concentration, because it reduces the independence of competitors' conduct on the market and diminishes their incentives to compete ... 62... A situation where only one undertaking discloses strategic information to its competitor(s) who accept(s) it can also constitute a concerted practice. Such disclosure could occur, for example, through contacts via mail, emails, phone calls, meetings etc. It is then irrelevant whether only one undertaking unilaterally informs its competitors of its intended market behaviour, or whether all participating undertakings inform each other of the respective deliberations and intentions... For example, mere attendance at a meeting where a company discloses its pricing plans to its competitors is likely to be caught by Article 101, even in the absence of an explicit agreement to raise prices. When a company receives strategic data from a competitor (be it in a meeting, by mail or electronically), it will be presumed to have accepted the information and adapted its market conduct accordingly unless it responds with a clear statement that it does not wish to receive such data."

143. It is reiterated that such principles have been aptly elaborated upon and enunciated in many ECJ decisions, one of the most prominent being Dole Food and Dole Germany v. European Commission C-286/13P, which has been referred to by the Commission in its previous orders. In this regard, the Commission clarifies that the principles enunciated therein had summarily been defined, in previous orders, as the 'Dole Test', however, the term has been misconstrued by the undertakings to mean a limb-by-limb test where each limb must be satisfied in order for a finding that the information exchanged between competitors was anti-competitive. We consider this a misconception, as the Dole judgement mainly reiterates principles established by the ECJ over time when faced with instances of concerted practices/agreements where information was exchanged between competitors and does not provide for a mandatory limb test that must be adhered to in order to find a violation of such nature.

144. Coming to the merits of the instant matter, it has not been denied by any of the undertakings that there was no act of exchanging information. However, what is denied is the nature of the information exchanged, i.e., that the information was not commercially sensitive, the information exchanged was one-off instance or not frequent, hence, could not be termed as anti-competitive given the economic context of the relevant market. Is the Information Exchanged 'Commercial Sensitive'?

145. There is significant evidence attached to the Enquiry Report along with the findings of the Enquiry Report as well as documents and submissions made by Counsel on behalf of the Undertakings evidencing exchange of stock information. The Enquiry Report has categorized sharing such information, in paragraph 94 thereof, to be highly sensitive in nature since it allows the undertakings to assess and coordinate on future sales volumes and pricing strategies and to control the supply of sugar in the market, visibly acting in a concerted and coordinated manner.

146. According to the Information Exchange Policy Roundtable, "confidential information (i. e., information on the very nature of the business, such as prices, quantities, commercial strategies, and the like) generally cannot be disclosed to competitors. Competition law enforcers are often very suspicious when information is exchanged between competitors regarding these sensitive competitive variables... Agencies are usually concerned with exchanges of data regarding future strategies, including prices, sales, and capacities trends. This information is particularly sensitive and should remain within the corporate knowledge of each company... The exchange of current information is more likely to be considered an infringement of competition law if the information can be used to determine the conduct of participants in the market at the time of the exchange."

147. Upon analysis of the submissions made by the competition agency participants in the Information Exchange Policy Roundtable, when assessing the compatibility of the exchange of information between competitors with the competition rules and the potential anticompetitive object or effect of the same, briefly the following factors are considered: i. The purpose of the exchange ii. The type of information exchanged - whether public, confidential or sensitive in nature iii. The level of detail of information - whether aggregated or otherwise iv. The frequency of the exchange v. The characteristics of the product in question vi. Level of market concentration vii. Importance of the information exchanged for setting of prices, volumes or predicting (forecasting) commercial policies of other players

148. We deem it pertinent to examine here the economic theory behind information exchange and how it can help in achieving collusive outcomes. One of the fundamental assumptions of perfect competition is that firms and consumers have perfect information. In reality, however this is not the case. Regulators and consumer groups often see market transparency as a laudable goal, so it may be surprising that firms' openness with respect to their own information can harm competition. A common theory of harm is that information exchange facilitates coordinated outcomes and reduces the risks inherent in competitive markets, replacing them with certainty and stability. By definition, any exchange of information will reduce uncertainty to some degree; so, the key question is whether such reduction harms competition in terms of overall output and prices17.

149. Data sharing to certain extent may be considered beneficial in terms of allowing firms to benchmark themselves in certain areas, vis-a-vis their competitors, and helps promote innovation and best practices or enhancing competition. However, conversely, rivals can indulge in exchange of information that is commercially very sensitive e.g. prices, supply volumes or terms of trade. Such exchange can be either ancillary to or adjunct to a cartel with the view to monitor any deviations from the conspiracy, or it can be a standalone form of exchange.

150. Generally, from a competition law perspective sharing of information between competitors can be placed along a spectrum, as given in Figure-2 below, ranging from information that will always be problematic at one end and on the other end information that is generally not considered problematic. The potential for anti-competitive effects depends on a number of key factors, such as the type of information exchanged and the structural characteristics of the market involved

18. Figure 2 Spectrum of considerations for information exchange cases Source: Oxera, based on European Commission (2011), `Guidelines on the applicability of Article 101 of the Treaty on the Functioning of the European Union to horizontal co-operation agreements', Official Journal of the European Union, 2011/C 11/01, section 2.

151. In light of the above spectrum, information that can be considered as problematic includes: i. Information exchanges among competitors of data regarding future prices and/or quantities (such as future sales, market shares, territories or customer lists); ii. Information sharing on current conduct that reveals intentions on future market behaviour (outside pricing and quantity information) or cases where the combination of different types of data enables the direct deduction of intended future prices and quantities to have the object of restricting competition; and iii. Any exchange of information that may not have the intention of restricting competition but may have that effect.

152. The Article 101 Guidelines state that the information exchanged must be strategic in nature and states that: "The exchange between competitors of strategic data, that is to say, data that reduces strategic uncertainty in the market, is more likely to be caught by Article 101 than exchanges of other types of information, Sharing of strategic data can give rise to restrictive effects on competition because it reduces the parties' decision-making independence by decreasing their incentives to compete. Strategic information can be related to prices (for example, actual prices, discounts, increases, reductions or rebates), customer lists, production costs, quantities, turnovers, sales, capacities, qualities, marketing plans, risks, investments, technologies and R&D programmes and their results. Generally, information related to prices and quantities is the most strategic, followed by information about costs and demand. However, if companies compete with regard to R&D it is the technology data that may be the most strategic for competition. The strategic usefulness of data also depends on its aggregation and age, as well as the market context and frequency of the exchange." (emphasis added).

153. The product market under question is that of white refined sugar, which can be differentiated from the other forms of sugar such as brown sugar and gur in terms of physical characteristics, price and intended usage. White refined white sugar produced by mills is homogenous and to the ordinary consumer, sugar produced by one mill is indistinguishable from that produced by another mill. Moreover, it is sold either to commercial consumers or at the retail level in open or pre-packed plastic bags without any branding, therefore, there is no product differentiation. In the absence of any product differentiation or branding producers can only increase their sales by reducing prices. In a competitive market firms' prices might be near to or equal to cost. In such a scenario firms stand to gain if they chose to substitute the risks of open competition with collusion.

154. The second factor peculiar to sugar (and other agricultural commodities) is the fact that the main raw material is produced only once a year. The sugar sector has another distinguishing feature as compared to other essential commodities, for example, wheat is harvested only once a year however, it can be stored and flour is milled throughout the year. In contrast, sugarcane starts losing its weight and sucrose content after harvest and therefore, has to be crushed as soon as possible by sugar mills to give a better yield. Resultantly, sugar can only be produced in the three months known as the crushing season. Economic theory tells us that prices are a function of demand and supply. On the demand side, the consumption is fairly constant, as has been observed from consumption data over the years, hence, it is the supply situation which actually affects price of sugar in the market. Supply is the stock of sugar available for sale and since more sugar cannot be produced, sugar stock figures are determinants of future prices.

155. As sales are made they are subtracted from the total sugar quantity to give a figure for balance stock. This may be summarized through a simple accounting formula: [Opening stock + Sugar produced] - Sales = Balance/closing stock.

156. Based on stock positions, availability or non-availability of stocks becomes a highly sensitive and critical information. The role of perception of shortage in this regard cannot be undermined as it leads to giving different market signals at different levels effecting not only the availability of the product but also, more likely than not, an upward price trend at any or all levels, be it manufacturers, wholesale dealers, retailers or consumers; contributing also largely to the market sentiments and having a role to play in creating any crisis like situation, which may very well even prompt speculation/satta.

157. As stated above, given the relative stability of demand, the ultimate factor leading to price competition in the relevant market is the stock information. The stock available is not only used to meet the national demand of sugar in the country, but also to determine the export quantities, if any, for the same in the event of any available surplus. Given that there is no restriction on the ex-mill price for undertakings to sell sugar and on traders to uplift sugar from specific mills except for normal cost-factors such as cost in transportation, being privy to stock information of a mill also influences an undertaking's independent commercial decision to sell its stock in order to recoup its costs and/or maximize its profit.

158. Hence, we find merit in what is argued in paragraph 94 of the Enquiry Report that stock position of each mill is highly sensitive in nature, since it allows sugar mills to assess and coordinate on future sales volumes and pricing strategies, effectively distorting competition in an already highly regulated market.

159. Coordination will also be most likely where information is exchanged concerning factors on which firms may have an incentive to strategically coordinate. Exchanges relating to prices, quantities or other commercially sensitive or strategic information will usually raise more concerns than, for example, those relating to standards or safety records.19 We reiterate the argument made above vis-a-vis how sugar stock position is strategic in the context of the sugar industry where sugar is produced only in the crushing season and sold throughout the year. The stock positions in essence are proxies for future production quantities.

160. Similarly, the frequency of communication among cartel members depends as well on the nature of the product. Homogenous goods sold in relatively small quantities are amenable to simple rules that limit the need for intra-cartel communication. Where there is a lot of product variety or sales are very lumpy, communication may be required for each transaction.

161. We now come to the question of whether the stock information is public knowledge, hence, not confidential, therefore, not commercially sensitive in nature. In this regard, the undertakings argued that stock information and data is available with the Provincial Cane Commissioners and is also compiled, collated and contained in the working papers, which are circulated and presented to all members of SAB, including PSMA and its members.

162. In this regard, we refer to, once again, the Information Exchange Policy Roundtable wherein it was observed that information exchange is genuinely public if it makes the exchanged data equally accessible to suppliers and customers. Furthermore, it was stated that: "Most agencies interpret the notion of "publicly available information" narrowly: in order not to give rise to competition concerns the information exchanged has to be genuinely public, i.e., the information must be readily observable and available to everyone (i.e., to both competitors and customers) and at no cost. Search and collection costs play an important role. If the information is available to the public but its research and its retrieval and difficult and costly, the information is not genuinely available to the public."

163. In light of the above, we find that just because the information is available with a public body, i.e., the Cane Commissioner Office(s), and disseminated to industry stakeholders that are members of SAB, does not equate to the same being publicly available in absence of any dissemination to customers and suppliers alike. In any case, the stock information provided by the Provincial Cane Commissioners, as admitted by the undertakings in their own submissions, is collated and aggregated data without referring to any individual mill based stock data on a current/fortnightly basis. Any previous stock figures requested by SAB are also in the form of historical data. A table of the information provided by the Provincial Cane Commissioner in the SAB meetings is as follows: Description 1-Punjab (27.07.2020) 2-Sindh (15.07.2020) 3-KPK (15.07.2020) TOTAL (1+2+3) A. New Sugar produced 2019-20 3.057 1.459 0.363 (0.302 + 0.061) 4.879 B. Remaiing Old stocks 2018-19 0.457 0.001 0.036 0.506 Total sugar stocks: (A+B) 3.512 1.460 0.400 5.352 Sold/off take 2.553 0.815 0.324 1.987 Balance stocks as of 20.07.2020 0.960 0.644 0.075 1.680 Source: Minutes of SAB meeting held on July 2020

164. Moreover, certain undertakings (Counsels on behalf of Group 1-3) have also submitted excerpts from the 'Monthly Surveys of Industrial Production and Employment in Punjab' issued by the Punjab Bureau of Statistics, which showcases, only in a few monthly editions, inter alia mill-wise capacity figures, the same is an aggregate figure for a certain period. Moreover, although such monthly reports are available on the website of the Bureau of Statistics Punjab, however, data pertaining to the sugar sector (and various other manufacturing industries) in this report is in an aggregated form and includes: sugarcane crushed, production of sugar, sale of sugar and closing stock of sugar. It is important to note here that this information is aggregate and not mill-wise and secondly, this report presents historical information. For example, on 15 January 2021, the Bureau of Statistics Punjab's website contains a report for the month of September 2020. Hence, the same is a statistical publication put out by the Bureau of Statistics. Statistical information is distinguishable from the commercially sensitive stock information shared by PSMA and its members since it is, inter alia, a) in aggregate form and b) more importantly is historic in nature.

165. We refer to the Dole judgement, wherein the applicants maintained that the information exchanged fell within the public domain or was capable of being obtained from other sources such as trade publications, which even contained more detailed information on expected pricing direction in the relevant sector. In support of their claims, the applicants referred to on-line periodicals which allegedly provided timely and comprehensive details on the banana market. The General Court, however held that Dole's or Weichert's point of view on certain information, which was significant for the conditions of supply and demand and which could not be obtained other than by means of discussions with the undertakings concerned, as well as its impact on the development of the market, did not by definition constitute publicly available information (Para 279 thereof). The General Court further distinguished that the publications referred to by the undertakings were issued after the weekly quotation prices were set and not before and one of the specific publications referred to did not make any mention of any price trends for the forthcoming week. In any event, it was held that the European Commission's findings, in itself, were not incompatible with its conclusion that the practice in issue had an anti-competitive object, which was based on an overall assessment of the practice.

166. Also, in Case T-758/14 Infineon Technologies AG v. European Commission (upheld by the ECJ), the European Commission's decision was under challenge whereby four undertakings had coordinated their market behavior by means of the exchange of commercially sensitive information concerning pricing generally and prices charged to specific customers, contract negotiation, production capacity or utilization of that capacity and their future conduct on the market. The applicants did not deny meetings or contest the content of the exchanges but that the information exchanged was not competitively sensitive. The General Court shared the European Commission's view that such an exchange of information on current and future prices, as well as on capacities, is capable of influencing directly the commercial strategy of competitors. Just because certain data was public also had no bearing on the finding that the applicant had unlawfully exchanged confidential information relating to their prices and future capacities (Paras 162-168).

167. In this connection, another example where PSMA was privy to non-public information can be seen from the minutes of the SAB meeting held on 13 September 2019 and 29 October 2019 respectively where 7 sugar mills in Sindh had refrained from providing their stock information due to pendency of cases before the National Accountability Bureau. Such figures were not included in the table provided by the Provincial Cane Commissioners, however, Chairman, PSMA explained that if such stocks were added then the actual closing stocks for the concerned period would be greater.

168. In light of the discussion above, we find that stock figures amount to information related to the very nature of the business of the undertakings, which are all active in a homogenous product market and by nature is considered to be a sensitive competitive variable as the availability of sugar stock is directly linked to price competition in the relevant market. More stock, generally, equates to more availability of sugar, which in turn puts a downward pressure on prices for the end-consumer, whereas, a stock shortage leads to insufficient supply to meet demand, hence, a likely increase in prices.

169. Coming to the allegation of whether such stock information has been shared and discussed by PSMA member undertakings, we find from the documents on record, that discussion, sharing and collection of stock information data dates back to 2012 for the duration of the enquiry period and that such information was required to be mill specific, not historical in nature and not provided in any aggregated form. The undertakings have acknowledged that stock information is collected and shared where the undertakings' own submissions state that stock data must be collected from all member undertakings of PSMA for the purpose of discussing the same in SAB meetings and corroborating the data provided by the Cane Commissioner. There is also clearly nothing on record, neither in the submissions of the undertakings or in any of the documents annexed to the Enquiry Report or provided by the undertakings that evidence any undertaking protesting to such sharing of information or questioning the need to provide the same to PSMA. Therefore, it is clearly inferred that such practice has continued during the enquiry period on a frequent basis.

170. The record also reveals that such information has been continuously provided to PSMA in the form of fortnightly reports and PSMA has required the cooperation of all its member undertakings to share stock information in this regard. We refer, in particular to the following AGM minutes: i. 47th AGM held on 17 October 2012 wherein it was stated that "a committee was constituted to collect data from the mills and supply it to the PSMA centre office for compilation of fortnightly reports on regular basis and its further distribution to the quarters concerned. It was also agreed that the sugar mills may lose its membership in case it did not provide the production data." ii. 48th AGM held on 24 September 2013 wherein it was decided by the AGM that "all mills to supply their production and stock figures to the PSMA zonal offices and PSMA centre office to enable them to come up with the correct figures in future." iii. 51st AGM held on 20 October 2016 wherein the representatives of PSMA stated that they would appreciate cooperation of the member mills to provide reliable data and production figures, to which the members expressed their support and cooperation.

171. The evidence attached to the Enquiry Report at Annex DI pertaining to the email correspondence in which individual member undertakings sent PSMA 'fortnightly stock reports' include: i. emails dated 3 January 2016 containing the stock report of Jauharabad Sugar Mills as at 31 December 2015; ii. email dated 23 January 2016 from Fatima Group containing stock report as at 31 December 2015; iii. email dated 23 February 2016 from Hunza Sugar Mills containing stock report as at 15 February 2016; iv. email dated 10 December 2016 from Ittefaq Sugar Mills containing stock report as at 30 November 2016, reproduced as follows: "From:IttefaqSugar[nailto:ittefaqsugar@hotmail.com] Sent:Saturday,December10,20164:41p.m. To: PSMA LHR; Sameem Subject: FORTNIGHTLY ENDING REPORT 30-11-2016 Dear Sir, Kindly find an attached herewith sugar stock report of the fortnight ending 30-11-2016 for your kind information please. Thanking you, we remain. AGM (Finance) Ittefaq Sugar Mills Limited Shafiabad - Channi Goth"

172. The above emails depict that mill-specific information related to cane crushed, sugar produced, carry forward/old stock, total sugar, quantity sold, balance stock and sold percentage is typically obtained from each mill-undertaking. The same is also evidence of instances where the decisions of PSMA in the aforementioned AGMs have been implemented and member-undertakings have cooperated by sharing their stock information.

173. We note, as highlighted in the Enquiry Report that such information has also been discussed by member undertakings located in Punjab, i.e., forming a part of PSMA Punjab zone, inter se and that the member undertakings located in Punjab were able to access the same. In this regard, Annex D1 consists of an email dated 9 September 2016 sent from m.arif@psma.pk to nadia.sarwar@chanarsugar.com and which is titled `Fortnightly Report as on 09-09-2016' and states: "Plz find upto date report of Stock position of Sugar. Regards, Muhammad Arif Manager Admin and A/c PSMA(PZ)"

174. The attachment to the above email contains mill-wise stock and sales positions as of 9 September 2016, which shows that the information is current and not historical. Similarly, there are two other email exchanges where the PSMA office is sending mill wise stock information to officials of Jauharabad Sugar Mills (emails dated 23 January 2017 and 20 March 2018). In the 20 March 2018 email, said stock positions were also shared by the PSMA office with Chanar Sugar Mills. Hence, proving that commercially sensitive information was consistently exchanged/discussed by PSMA and the member undertakings located in Punjab.

175. The exchange of commercially sensitive stock information amongst the member undertakings located in Punjab is further evidenced by the WhatsApp group itself, consisting of 48 participants and which is titled as `PSMA - PZ (Official)' and which was created by an official of PSMA, Lahore (Mr. Arif) on 7 July 2020 (refer to Enquiry Report Annex A5 at pg 9). The existence of this group was also not rebutted by any undertaking concerned. There is clear sharing of current, mill-specific stock positions and discussion thereon (Annex D2). For ease of reference, relevant excerpts are reproduced below: Above stocks consolidated by Punjab Goverment on yesterday 17th July 923008427701@s.whatsapp.net (923008427701@s.whatsapp.net) 7/18/2020 - 5:09:58 p.m. Media/WhatsApp Documents/Consolidated Sugar Report 17.07.2020.pdf 923008427701@s.whatsapp.net (923008427701@s.whatsapp.net) 7/18/2020 - 5:09:58 p.m. We need to recheck current stocks once again. 923218461083@s.whatsapp.net (923218461083 @s.whatsapp.net) 7/18/2020 - 5:10:17 p.m. Then total consumption is 3,552,000 for 7-1/2 months and monthly consumption works out to be 473,600 per month. 923218461083@s.whatsapp.net (923218461083@s.whatsapp.net) 7/18/2020 - 5:13:07 p.m. According to this calculation renaming stocks are hardly sufficient for 4 months and remaining period to season is 4-1/2 months from mid July to end Nov. 923218461083@s.whatsapp.net (923218461083@s.whatsapp.net) 7/18/2020 - 5:18:02 p.m. Quote At: 7/18/2020 - 5:09:58 p.m. Message ID: 3AECOF 1 BE7B82CCCOCD8 This seems correct. As 1.1 min ton stock 923008633666@s.whatsapp.net (923008633666@s.whatsapp.net) 7/18/2020 - 5:18:31 p.m. Need a very careful calculation and review of data before giving any suggestion to the Govt. 9132118461083@s.whatsapp.net (923218461083@s.whatsapp.net) 7/18/2020 - 5:19:20 p.m. Can confirm each mill 923008633666@s.whatsapp.net (923008633666@s.whatsapp.net) 7/18/2020 - 5:19:50 p.m. Quote At: 7/18/2020 - 5:20:44 PM Message ID: 3A95F6053B61D298CE2A Punjab 1.1 million, Sindh 0,6 million and Kpk 0.1 million tons 923218461083@s.whatsapp.net (923218461083@s.whatsapp.net) 7/18/2020 - 5:25:24 p.m. Closing stocks as July 17, 2020. JDW1 121,694 tons. JDW2. 32,028 tons and JK1 (Mianchanu). 17,510 tons. 923218461083@s.whatsapp.net (923218461083 as.whatsapp.net) 7/18/2020 - 5:29:56 p.m. Closing stock at Indus on 17/7 is 64150 m.ton 923008453939@s.whatsapp.net (923008453939@s.whatsapp.net) 7/18/2020 - 5:36:11 p.m. Quote At: 7/18/2020 - 5:36:11 p.m. Message ID: 0D57C5A2A9F2DF3E078B71EC32A72568 Physical stocks? 923218461083@s.whatsapp.net (923218461083@s.whatsapp.net) 7/18/2020 - 5:37:21 p.m. Yes it's Godown position. 923008453939@s.whatsapp.net (923008453939@s.whatsapp.net) 7/18/2020 - 5:38:13 p.m. Quote At: 7/18/2020 - 5:25:24 p.m. Message ID: 3A476384407893228530 I think Sind position need to re check 923008633666@s.whatsapp.net (923008633666@s.whatsapp.net) 7/18/2020 - 5:39:11 p.m. KPK 100k doubtful 923008403011 @s.whatsapp.net (923008403011@s.whatsapp.net) 7/18/2020 - 5:39:39 p.m. P1 get current data from both provinces. 923218461083@s.whatsapp.net (923218461083@s.whatsapp.net) 7/18/2020 - 5:41:38 p.m. Fsm stock correct 923008633666@s.whatsapp.net (923008633666@s.whatsapp.net) 7/18/2020 - 5:41:38 p.m.

176. Given, the frequency of the stock information exchanged, the fact that the information was individualized, the fact that it was recent and current in the form of daily/fortnightly exchanges, based on the discussions of the same between the member undertakings located in Punjab inter se and with PSMA as evidenced by the documents on record including discussions in the annual general meetings of PSMA, the fact that it ultimately has an impact on price developments in the relevant market, hence, ultimately being a price-setting factor and the fact that it is intrinsically linked to the commercial policy of undertakings makes the stock information 'commercially sensitive' in nature.

177. The issue, therefore, is that a decision was made regarding the sharing of commercially sensitive stock information and data by all member undertakings with PSMA and that the member undertakings located in Punjab, as per evidence, went a step further to concert with each other in discussing and disseminating stock information amongst themselves. We find that the undertakings participated in a series of meetings and communications during which the information was exchanged. Hence, through this conduct, each undertaking took part in a concerted action, together with its competitors, the purpose of which was to influence conduct on the market, including collectively determining exportable surplus of sugar stock and controlling supply thereto (discussed in further detail below) and to exploit as well as influence the independent commercial policy of each independent mill.

178. Although the evidence on record attached with the Enquiry Report is termed as `fragmented' by the undertakings concerning the provision of stock information, we are of the considered view that all member undertakings have admittedly provided the stock information to PSMA. As stated earlier, provision of stock information sharing has not been denied for whatever purpose that may be. There is also sufficient evidence, as highlighted above, to show that PSMA has time and again decided that stock information and data must be shared, even placing a sanction on all member undertakings for failing to comply with the same. The fact that even in the WhatsApp group, member undertakings in Punjab are required to share their stock figures by the day's end in the year 2020 is further evidence that the practice is prevalent throughout the aforementioned enquiry period during 2012 to 2020.