Abuse of dominant position
Abuse of dominant position legal meaning, translation and judicial precedents.
Meaning & Judicial Interpretation: (اردو مفہوم اور قانونی تشریح)
Complainants (Internet Service Providers) alleged that the respondent (Electricity Supply Company) was in a dominant position in the relevant market for "right of way for aerial cables across electricity poles" and had violated Ss. 3 & 4 of the Competition Act, 2010
Contention of respondent was that it did not operate in the relevant market and was active in a separate market altogether
Validity
Issue at hand did not concern supply/distribution of electricity but the public right of way to be/or being provided by respondent
Electricity distribution facilities covered an area of approximately 78,088 sq. km, which further strengthened the aspect of dominance of the respondent in the relevant market of right of way as it owned/managed a significant number of electric poles and no other adequate substitutes were available in the relevant market
Respondent's argument was rejected.
Term "unfair trading conditions" is indeed wide in scope and deals with either or both exclusionary and exploitative forms of abuse of dominance
It includes unfairly coercing customers by forcing an entity to sell services against their will and unfairly taking advantage of one's superior bargaining position to impair free decision making of a transacting party.
Complainants (Internet Service Providers) alleged that the respondent (Electricity Supply Company) was in a dominant position in the relevant market for "right of way for aerial cables across electricity poles" and had committed price discrimination by charging different prices for the same service from the complainants as compared to the price charged from normal TV cable operators
Validity
Respondent charged complainants PKR 100 per pole/structure, while TV cable operators paid only PKR 10
Such discriminatory conduct was solely for the reason of the dominant position it held rather than for any objective reasons and could be deemed to be exploitative and harmful for undertakings deploying Aerial Optical Fiber Cable
Respondent was found to have acted in violation of S. 3(3)(b) of the Competition Act, 2010
Respondent was directed to provide access to the right of way to the complainants on fair, reasonable and non-discriminatory terms and not to repeat the prohibited act.
Complainants (Internet Service Providers) alleged that the respondent (Electricity Supply Company) was in a dominant position in the relevant market for "right of way for aerial cables across electricity poles" and had imposed unfair conditions on the complainants by stipulating 10 minutes free advertising for it and free internet facility for its offices on top of charging a rent for use of the relevant service
Validity
Conditions appeared onerous and not freely negotiated upon by the parties concerned
It could also be treated as an added barrier for undertakings to compete effectively and efficiently in the market for provision of internet cable and telephony services
In terms of monetary value, it was also an added cost
Competition Commission declared that the contravention in terms of S. 3(3)(a) of the Competition Act, 2010 had been committed by the respondent
Respondent was directed to provide access to the right of way to the complainants on fair, reasonable and non-discriminatory terms and not to repeat the prohibited act.
Section 3 prohibits any abuse by an undertaking that is in a dominant position.
Complainants (Internet Service Providers) alleged that the respondent (Electricity Supply Company) was in a dominant position in the relevant market for "right of way for aerial cables across electricity poles" and had violated Ss. 3 & 4 of the Competition Act, 2010
Contention of respondent was that the complainants had substitutes for right of way
Validity
Developing and digging underground passages required heavy investment cost and prior approvals from the relevant authorities and there also existed practical impediments for laying down underground cables such as lack of access to corridors/green belts on road, streets, etc
As for PTCL (telecommunication company) poles, the same were customized to PTCL's own requirements i.e. installed at the end of PTCL's underground network of cables
Streetlight poles were not a suitable substitute due to being scattered, positioned in different areas and not being available in all areas
Respondent's argument was rejected.
Complainants (Internet Service Providers) alleged that the respondent (Electricity Supply Company) was in a dominant position in the relevant market for "right of way for aerial cables across electricity poles" and had violated Ss. 3 & 4 of the Competition Act, 2010
Contention of respondent was that it had annulled the Pole Renting Policy
Complainants claimed that refusal to provide right of way amounted to refusal to deal in violation of S. 3(3)(h) of the Competition Act, 2010
Validity
Section 27A of the Pakistan Telecommunication (Re-organization) Act, 1996 and Policy Directive issued by the Federal Government had imposed a legal obligation on the respondent to provide right of way
Conduct of the respondent was discriminatory as admittedly, decommissioning notices related to the removal of cables were only sent to the complainants
No other action was taken against normal cable TV operators
Annulment of the Pole Renting Policy and denial of right of way might not be a 'classic refusal to deal' under S. 3(3)(h) on the part of respondent i.e. solely based on a monopolistic intent to of keeping the facility/poles for its own commercial benefit or to strengthen its own dominant position, nevertheless, a clear contravention of S. 3 of the Competition Act, 2010, was established through the respondent's discriminatory and unfair conduct concerning the complainants
Respondent was directed to restore access to the right of way to the complainants on fair, reasonable and non-discriminatory terms and not to repeat the prohibited act.
Commission issued show cause notice to the respondent housing authority for violation of S. 3 of the Competition Act, 2010 for not issuing NOC (No Objection Certificate) to a CIT (Cable Internet and Telephony) service provider
Respondent's management had exclusive rights to administer the housing society including a grant of ROW for provision of CIT services and therefore, had 100% market share in the relevant market
Management of respondent was preventing or restricting, reducing or distorting competition in the relevant market in a systematic manner, inter alia, by favouring its own subsidiary and/or applying dissimilar conditions in relation to two seemingly equivalent transactions by requiring revenue sharing percentage, exclusionary practices in terms of excluding the service provider from the relevant market by not allowing it to lay down its infrastructure in the relevant market, and ultimately refusing to deal on the pretext of potential physical damage to infrastructure and unavailability of space the corridors, which according to respondent had already been occupied by other CIT service providers
Conduct of the management of respondent was adversely affecting competition in the provision of CIT services within the relevant market
Respondent had also failed to provide any rational commercial or objective justification in terms of efficiency gains for its exclusionary and anti-competitive conduct under review
Such was discouraging investors to the consumer's detriment and proliferation of CIT services which in turn was affecting the national economy as well as the competition inter se other service providers which was prohibited under the Competition Act, 2010
Commission observed that the respondent had abused its dominant position in terms of S. 3(1) read with Ss. 3(3)(e), (g) & (h) of the Competition Act, 2010
Respondent was directed to offer to the service provider ROW on terms and conditions which were no less favourable than the terms and conditions to incumbent service providers.
Refusal to deal or refusal to supply is a behaviour in which a dominant undertaking refuses to sell, supply, or grant access to another firm, or is willing to sell only at a price that is considered "too high", or is willing to sell, supply or grant access only under such conditions that are unacceptable, in addition, refusal can also take the form causing undue delay or otherwise imposing of unreasonable conditions in return for the supply.
When a dominant under taking owns and/or controls and/or itself uses and/or has the ability to grant the right to use an essential facility i.e. the facility or the infrastructure without access to which other undertakings cannot provide competing services to the end consumers, refuses competitors to access such facility or grants access to competitors only on terms less favourable than those which it gives to others, it places the competing undertakings at a disadvantage; these are considered exclusionary practices that are specifically prohibited under S. 3 read with subsection (3) clauses (e) and (h) of the Competition Act, 2010.
Where a dominant undertaking takes advantage of its dominant position and uses it as a bargaining tool to induce customers to accept certain trading conditions of its choice, such a practice comes under the umbrella of exclusionary practices and such practices are strictly prohibited under section 3of the Competition Act, 2010.
Commission issued show cause notice to the respondent housing authority for violation of S. 3 of the Competition Act, 2010 for not issuing NOC (No Objection Certificate) to a CIT (Cable Internet and Telephony) service provider
Contention of respondent was that Commission lacked the mandate to determine the ROW (Right of Way)
Validity
Product market in the case consisted of grant of ROW to provide CIT services and the relevant geographic market consisted of the area where the respondent had developed the housing societies, as the conditions of competition were sufficiently homogeneous throughout that area and distinct from other neighbouring areas
While CIT service providers needed ROW permit, on a timely basis, any undue or unreasonable delay or restrictive practices on the part of public body or private entity, managing the specified territory could increase the operator's cost of deployment of such network(s)
Modern-day technology development required the CIT services of infrastructure laying that involved civil/earths for infrastructure operation and maintenance
For CIT services providers, ROW could be described as essential facility for laying down their infrastructure across the public and/or private areas for the provision of CIT services to the residents of that area
Respondent was directed to offer to the service provider ROW on terms and conditions which were no less favourable than the terms and conditions to incumbent service providers.
Contention of complainants was that in response to proceedings undertaken by Enquiry Committee their grievance was redressed which had been pending since long
Effect
Conclusions of Enquiry Report were well founded and could not be controverted
One of the grievances of complainants stood addressed during the conduct of enquiry and did not require further emphasis
Competition Law was a subject of principles stimulating innovation, productivity and competitiveness, contributing to an effective business environment in country
Such competition generated economic growth and employment and also had created possibilities for small and medium sized enterprises, removed barriers that had protected entrenched elites and reduced opportunity for corruption
Competition increased a country's attractiveness as a business location, triggering national and foreign investments
Competition also delivered benefits for consumers through lower prices, improved services and greater choice
Competition generated total consumer welfare and also contributed to creating a level playing field for business which had to apply a common set of standards, supporting competition
Complaint was dismissed in circumstances.
Complainants filed complaint against respondent/PTCL with Competition Commission for being engaged in abuse of its dominant position in violation of S. 3 of Competition Act, 2010
Enquiry in terms of S. 37(2) of the Competition Act, 2010 was initiated by the Commission
Based upon the conclusions and recommendations of the enquiry report, Commission approved initiation of proceedings under S. 30 of the Competition Act, 2010 and show-cause notice was issued to the respondent
Complainants filed, subsequently, application for withdrawal of complaint
Commission vide letter informed the complainants that it had initiated the enquiry in the matter and that it could permit the withdrawal of the complaint under Regln.26 of the Competition Commission (General Enforcement) Regulations, 2007, however, proceedings or enquiry initiated would not necessarily abate with said withdrawal
Respondent/PTCL had stressed that the complainants having withdrawn their complaint and being no more interested in pursuing the matter even at the enquiry stage, the matter should have been closed by the Commission
Validity
Held, Competition Commission was established with exclusive statutory mandate to provide free competition in all spheres of commercial and economic activities to enhance economic efficiency and to protect consumers from anti-competition behaviour
Under the provisions of S.37(2) of the Competition Act, 2010 it was mandatory obligation of the Commission to conduct an enquiry in the matter complained of, unless it was of the opinion that the complaint was frivolous or vexatious or was based on insufficient facts or was not substantiated with prima facie evidence
Commission, while, allowing the parties to withdraw the complaint, under Regln.21 of Competition Commission (General Enforcement) Regulations, 2007, placed reliance on the categorical stipulation in the same Regulation that the enquiry or the proceedings thereof, would not necessarily abate on such withdrawal and the Commission could proceed in the matter, if so decided by it
Upon conclusion of the enquiry and in pursuance of the provisions of S.37(4) of the Competition Act, 2010, Commission could initiate proceedings under S.30 of Competition Act, 2010, where it was in the public interest to do so as Commission was entrusted with the responsibility of looking after the interest of general public
Unilateral withdrawal of the complaint by the complainants would not prejudice the proceedings against the respondent/PTCL pending before the Commission
Complainants, however, were allowed to withdraw themselves from the proceedings
Proceedings before the Commission in the matter of show-cause notice issued to 'PTCL' for prima facie violation under S.3 of the Competition Act, 2010, were maintainable and would continue in accordance with law.
Undertaking, floated an advertisement, whereby a "Request for Proposal" RFP was issued for the purchase/procurement of "Enterprise Resource Planning" ERP software and related hardware implementation service
Complainant had impugned the "Request for Proposal" on the grounds that through certain clauses in the "RFP", unfair terms and conditions had been imposed, thereby excluding, discriminating and restricting fair participation of local vendors, including the complainant, in the bidding process
Complainant had further alleged that the 'RFP' was tailor-made, so as to select only a specific international vendor; which directly or indirectly, excluded local vendors including the complainant from the market
Undertaking in question was a public sector organization operating and managing a retail chain of about 6,000 stores across Pakistan and fell within the purview of a term "undertaking"
Commission, found that the undertaking 'ERP' software and related equipment, were highly unlikely to be substitutable for other markets and businesses
Undertaking was a dominant one in the relevant market, as it had the ability to work upto an appreciable extent independently of its competitors, customers, consumers or suppliers
Undertaking had a sufficient degree of market power to either adversely affect competition or distort competitive dynamics of the relevant market and had significant market power, while enabled it to favour one or more suppliers over the others
Undertaking had a retail network of around 6,000 stores with annual revenue of approximately sixty billion of rupees, which made it the single largest retail network dealing in household items targeting the lower strata of consumers across the country
Said undertaking also availed direct or indirect State subsidies on regular basis
In presence of valid procurement contract, no other vendor of 'ERP' software would be bidding for the same project and most probably could not even supply after value added services required by the undertaking
Undertaking would continue to have a dominant position in the relevant market by virtue of its number of stores in its network
Pre-qualification mandatory criteria laid down in relevant clauses of 'RFP' were unwarranted and unreasonable, discriminatory and exclusionary in effect and also appeared to favour particular bidders in defiance of the provisions of S.3 of the Competition Act, 2010
Clause 4.2 and clause 5 of the 'RFP' left the actual and potential bidders with uncertainty owing to which an insufficient number of bidders had been able to make meaningful bids; consequently competition in the relevant market was constrained to an appreciable extent in the market of suppliers of 'ERP' software and relative equipment in Pakistan in violation of S.3 of the Competition Act, 2010
Commission had noticed that the technical specifications and the evaluation criteria laid down in relevant clauses of the RFP, were arbitrary, unreasonable, unfair, discriminatory and exclusionary in effect and restricted for opportunity of participation within the competitive bidding process
Commission, directed the undertaking to be mindful of broad guidelines/directions while drafting future tender and to refrain from falling, adopting, implementing or carrying out any activity, in violation of Competition Act, 2010
Commission had passed an interim order which restrained the undertaking from awarding the contract, until the final order from the Commission
In view of the compliance oriented approach of the undertaking and fact that the contract had not been awarded the Commission did not impose any financial penalty
Order accordingly.
Complainant, a Credit Rating Company, had alleged that the credit rating award to the respondent, another such company, for proposed issue of sukuk was too low or below the cost bidding in contravention of Ss.3 & 4 of the Competition Act, 2010
Both, the complainant and the respondent had participated in procuring credit rating assignment
Complainant quoted Rs.7.22 million, whereas the respondent quoted a total Rs.1,100 (an initial fee of PKR and surveillance fee of PKR 100 per annum) for the rating assignment spanning 10 years
Complainant, had alleged that the token bid by the respondent was devoid of any legitimate business justification, or lacked a commercial sense thereof and was solely made to oust its competitor from the bidding
Complainant, further alleged that the respondent had acted in contravention of the Competition Act, 2010 and that since the bid was too low, that also amounted to predation in violation of S.3 of the Competition Act, 2010
Competition Commission, on the basis of said allegations, initiated an enquiry pursuant to S.37(2) of the Competition Act, 2010 and appointed Enquiry Committee to investigate the matter for possible violations of provisions of Competition Act, 2010
Enquiry Committee observed that "the general approach with regards to predatory pricing, was that prices were assumed to be predatory if they were below average variable costs; that in such a case, there was no conceivable economic purpose other than the elimination of a competitor, since each item produced and sold, entailed a loss for the undertaking and that in line with said observation, it was concluded that by respondent's own admission, it had submitted a bid that did not reflect its cost, rather it was a token bidding"
One of the material issues that emerged from the facts and submission made by the parties, was as to what was the relevant market and whether the respondent held a dominant position in the relevant market
'Relevant product (or services) market', was determined as the provisions of "credit rating and other allied services"
Conditions for the provision of credit rating services in the country, were uniform and homogenous, as there were no barriers within the territory of Pakistan in terms of geographic location for the competitors, customers and consumers
Relevant geographic market consisted of whole of Pakistan
Complainant and the respondent, both being engaged in the business of credit rating in Pakistan, market for credit rating in Pakistan was highly concentrated; both were providing their services in all categories of rating, such as entity rating, instrument rating, infrastructure project rating, real estate grading, corporate governance rating and financial risk assessment
Both complainant and respondent had market share of 55 percent and 45 percent respectively
Dominant position of the undertakings, did not solely flow from a market share that was a lesser or greater than the 40 percent threshold
Both the complainant and the respondent, held dominant position and were in a position to behave to an appreciable extent independently of their competitors, consumers and suppliers, irrespective of their market share in the relevant market
Complainant had made diverse allegations ranging from unfair, discriminatory and exclusionary conduct, including the predatory pricing to outset the complainant from the relevant market
Section 3 of the Competition Act, 2010, provided a non-exhaustive and illustrative list of abusive conditions
Commission, could take cognizance of other forms of abuses that were not outlined in S.3 of the Competition Act, 2010
Having a dominant position in the relevant market was not condemned by itself
Term "practices" used in S.3 of the Competition Act, 2010, included practice or conduct, or a single time infringement as its core objective was to assess, whether the conduct of a dominant undertaking in the relevant market, was aimed to impair or distort competition in the relevant market
Concept of "predatory pricing" comprised, not only of "predatory prices", but also strategies and exclusionary conduct by the dominant undertakings
No requirement existed that the alleged infringement of S.3 of the Competition Act, 2010, must have been repeated until the eventual closure of the competitor from the relevant market
Final bid submitted by the respondent, therefore, reflected a predatory pricing strategy
Respondent had failed to provide a viable commercial sense or any objective justification in terms of efficiency gained for the same
Commission, found no merit in the argument of the respondent that its quotation of Rs.1.100, was a pro bono and in the national interest
Commission concluded that the respondent had been engaged in predatory pricing in contravention of subsection (3) of Cl.(F) read with subsection 3(i)(2) of S.3 of the Competition Act, 2010
On account of violation of provisions of S.3 of the Competition Act, 2010, a penalty of Rupees Five Hundred Thousand (Rs.500,000) was imposed on the respondent, in circumstances.
Competition Commission received an e-mail, highlighting concerns that the residents of a Residential Colony were deprived of any alternate "Cable, Internet and Telephony Services (C.I.T. Services)" provider; that they were forced to subscribe a specific service; and that no other option or substitute was available because the Management of the Colony was not granting "Right of Way" (R.O.W.) to lay down C.I.T. in the Colony
Enquiry Committee concluded that Management of the Colony had exclusive control and dominant position in granting "R.O.W." in the area that its conduct appeared to be violative of S.3(1) read with 3(e), (g) and (h) of the Competition Act, 2010 by applying dissimilar conditions on the other network excluding it to provide its C.I.T. service
Based on the findings of the enquiry report, the Competition Commission issued show-cause notice to the Management of the Colony
One of the main issues involved in the case was; "whether 'Residential Colony' and the specific C.I.T. Operator had been dealt with in accordance with the procedure laid down in Competition Act, 2010"
Held, proceedings were based on an enquiry authorized by the Competition Commission pursuant to S.37(1) of the Competition Act, 2010 and show-cause notice was issued under S.37(2)(b) of the said Act
Commission found it appropriate that there had been no substantive or procedural anomaly during the enquiry stage and during the proceedings
All concerned parties were given ample opportunity of being heard and to present their view both in writing as well as during the conduct of the hearing
Both, the Residential Colony and the C.I.T. Operator had been dealt with in accordance with the procedure laid down in the Competition Act, 2010, in circumstances.
Terms and conditions stipulated in 'Provisional Booking Order' issued by seller company to its potential buyers for purchase of new car, appeared to create a significant imbalance in the parties' rights in favour of the Seller Motors Company and tantamount to unfair terms as envisaged in S.3(3)(c) of Competition Act, 2010
Enquiry Committee, in its report noted that, seller company, held a substantial market share and enjoyed economic power in the 1300 CC segment of car market, which enabled it to behave independent of its competitors and customers; thereby making it a dominant player in the relevant market
Seller company's buyer was apparently in a weaker bargaining position
Said 'Provisional Booking Order' gave seller company the sole right to; charge the price; design/specification; delivery scheme without any notice to the buyer; a conclusive right to interpret the terms of the contract, and; to decide the dispute between a buyer and seller company
Such terms created a significant imbalance to the disadvantage of buyer's rights and obligations arising under the contract
Terms of said Provisional Booking order prima facie, being unfair to the buyers, were in contravention of S.3(3)(a) of the Competition Act, 2010
Show-cause notice was issued to the seller company
Seller company filed a written response explaining its position and requested to allow opportunity to revive the draft of Provisional Booking Order to rectify the concerns raised by the Commission
Seller company submitted the final revised draft of 'provisional Booking order'
Initially, seller company had sole and absolute discretion to accept or reject the request of cancellation by the buyer; it was at the entire discretion of the seller company and the buyer would be bound to take delivery of the vehicle on full payment of the same
Seller company had rectified that imbalance, not only by relinquishing its unilateral right to reject the request for cancellation by the buyer, but also waiving off any charges in case the application for cancellation was based on an unsatisfactory charge in price or delivery schedule
Such rectification, made by seller company, had put the consumer at an equal footing with regard to aspect of cancellation
Under original Provisional Booking Order, seller company had the sole right to alter some or all terms and conditions of Provisional Booking Order and also the right to interpret them conclusively
Said clause had been completely removed from the revised draft of Provisional Booking Order
Another condition, whereby any dispute between the customer and seller company, was to be conclusively decided by the Managing Director of the company, had been amended to refer such dispute to the arbitrator to resolve and settle matter
Such revision of the terms had given fair and equal right to both the parties
Initially, seller company held the sole right to change the design, construction specification without notice to the buyer
Provisional Booking Order, was revised, which specifically mentioned that seller company, could make minor alterations to the design and construction specification of the vehicle, and would make such alterations in the vehicle as required by any Federal and/or Provincial Legislation
Seller company had sole right to change price of the vehicle without notice to buyer at the time of delivery
Said clause had created uncertainty as to price and buyer was not sure of how much extra amount was to be paid at the time of delivery
Said lacuna had been removed by explicitly mentioning in the revised draft Provisional Booking Order that revision of price could only be subject to a change, if any in Government levies/taxes and/or currency fluctuation
Provisional Booking Order had been amended and rectified to address the competition concerns raised in terms of S. 3(3)(a) of the Competition Act, 2010, in circumstances.
Urea Manufacturing Companies, who were engaged in the manufacturing and sale of fertilizers, were 'undertakings' as defined in clause (q) of subsection (1) of S. 2 of Competition Act, 2010
Competition Commission took notice of the increase in price of 50 Kg urea bags by the urea manufacturing units
Such unprecedented increase in the price of urea appeared to be anti-competitive and Competition Commission appointed an Enquiry Team
Enquiry Committee, was assigned the task to investigate the reasons behind the price hike, and to submit before the Commission; whether the price hike was a result of anti-competitive behaviour adopted by relevant undertakings individually/collectively in violation of provisions of Competition Act, 2010
Commission, also hired an independent consultant, who was given the task to carry out a comprehensive analysis of the prevailing price of urea and determine the rationale, reasonability, or otherwise of the price increase
Enquiry report was submitted before the Commission and with recommendation of the enquiry report, show-cause notices were issued to each of the undertakings
After taking into account factors, namely the effect of alleged gas curtailment, input costs, subsidies, profitability analysis, undertakings appeared to have indulged in the practice of unreasonable price increase
Undertakings being dominant in the relevant market, appeared to have abused their dominant position, both individually and collectively by carrying out unreasonable price increase in urea without any justification, which stood to prima facie violate clause (a) of subsection (3) of S.3 and subsection (2)(1) of said S.3 of the Act
Undertakings replied the show-cause notice and detailed grounds to justify increase in price of urea
'Farmers Associates Pakistan', during said proceedings requested the Commission to allow it to file an intervener application in accordance with Regln.27 of the Commission's (General Enforcement) Regulations, 2007, which request was granted by the Commission and undertaking objected to said intervening application
“Farmers Associates Pakistan” in its written submission, apprised the Commission that it represented a broad cross-section of farmers approximately 1900 hailing from all over Pakistan and that its membership was extended to them without regard to size of members, land holdings, it, in circumstances represented the interests of the farmers of Pakistan in general and its sizable and diverse members' community in particular
Out of seven undertakings, three raised objection that Farmers Associates Pakistan could not be allowed to join the proceedings as an intervener, whereas other parties/undertakings did not press that issue
First issue which arose and needed to be addressed for disposal of the matter was “whether the intervener's application could be allowed in the proceedings under S.30 of the Competition Act, 2010”
Intervention was a method by which a person or undertaking, not involved in the litigation as claimant or defendant, could make representation and submit information/evidence or expertise and could make an effective contribution to the decision-making process
Definition of 'Intervener', which had been laid out in Regln. No.2(1)(i) of Commission's (General Enforcement) Regulations, 2007, clearly spelled out that an intervener, could be either a person or persons or an undertaking to be allowed intervention in any proceedings under said Enforcement Regulations
No prerequisite of being an undertaking to be allowed to join the proceedings as an intervener existed
Applicant, a pharmaceutical company, pursuant to sale and purchase agreement, submitted pre-merger application seeking clearance for acquisition of business relating to portfolio of oncology products (excluding manufacturing) from another pharmaceutical company
During the first phase review of proposed merger, Commission found other company to be in dominant position in relevant product market and that company would create dominant position as result of proposed merger by acquiring market share of other company
Applicant company had marketed seventeen oncology products in Pakistan and other company, five products; out of which only one oncology product from each merger parties was substitutable with each other, and for which they had competed with each other in Pakistan
Relevant geographic market was national in scope
Applicant company had given its share in market, and was a small player in market for said common oncology product; whereas, other company was dominant
Large number of alternative to said common oncology products were available and were being marketed in Pakistan
Consumers would still have choice after completion of proposed acquisition
Competition Commission observed that proposed merger would reduce from 11 to 10 major companies developing and distributing said common product, which was large number of players
History of collusion (between merger parties) had not been found
Total sales generated from said common products by applicant company was negligible
Low price difference existed between said common products of applicant company and that of other company
If there was ten per cent increase in price of the product, consumers and purchasers might switch to one of many alternative products which were available in the market
Applicant company had not planned to discontinue its product and intended to market the same under brand name of the other company
Consumers and suppliers would, therefore, still have choice of purchasing said product with same name
Proposed acquisition was not likely to have appreciable adverse effect on competition in Pakistan
Competition Commission, allowing application, authorized proposed merger unconditionally in terms of S. 31(1)(d)(i) of Competition Act, 2010
Pre-merger application was allowed in circumstances.
Institution of Chartered Accountants of Pakistan (ICAP), issued 'July Directive' whereby it had prohibited its members and chartered accountant firms from training non-ICAP accountancy students
'ICAP', maintained that pursuant to subsequent directive (October Circular), said prohibition was narrowed down to such members and accountancy firms who were approved training organization of 'ICAP'
Said 'July Directive', had a wider scope and had placed an absolute bar on all members of 'ICAP' engaging trainees of other accounting bodies
Contention of 'ICAP' that subsequent to the 'October circular', show-cause notice issued to it had lost its basis had no merit
Such prohibition on accountancy firm foreclosed, shut out and precluded not only a large segment of the relevant market for non-ICAP students, but the most valuable segment
Accountancy firms were restricted in their choice and freedom to engage a trainee; while it deprived the non-ICAP students, both quantitatively and qualitatively, from gaining such experience, practically from the most prestigious segment of the training market which adversely impacts the accountancy firms as well as the value of the qualification offered by direct competitors of 'ICAP', thereby restricting, preventing and reducing competition in the relevant market
Normally, each accountancy body had a best of public practice firms and/or commercial organizations, which were recognized for imparting training, necessary to complete the requirements for getting membership of the institute
Those recognized trainers, then accept accountancy students and certify that experience gained by the students
Training through a public practice accounting firms, was a valuable form of training for accountancy students
Said 'July Directive', had also created a barrier for those students seeking entry in the market for provision of accountancy services in Pakistan
'ICAP' need not ban its members from training students of other accountancy bodies to purportedly improve the quality of training for their own students
'ICAP' ought not discourage, discriminate or otherwise unequally treat growing number of a human resource, essential for a vibrant economy
As a natural corollary of competition in the market, the increase in the number of such professionals in the past had provided and should continue to provide, the businesses and other consumers, not only with a greater choice, but also improved quality and reduced costs for accountancy services
'July Directive' and 'October Circular', were declared to be in violation of S.4 of Competition Act, 2010, and to be without any legal force
Penalty of Rs.25 millions, was imposed on 'ICAP', and it was restrained, from issuing similar Directives and Circulars, in future.
"Abuse of dominant position", Pakistan Law Portal, available at: https://paklawportal.com/words-terms-maxims/124941638
Precedents & Case Laws citing "Abuse of dominant position"
2023 C L D 1556
RANA ELECTRIC STORE — Appellant Versus COMPETITION COMMISSION OF PAKISTAN — Respondent
Court: Competition Appellate Tribunal2022 C L D 31
File No. 43/NAYATEL/C&TA/CCP/2016
Court: Competition Commission of Pakistan2025 C L D 15
Messrs STRAWBERRY SPORTS MANAGEMENT (PRIVATE) LIMITED, through Chief Executive Officer — Petitioner Versus FEDERATION OF PAKISTAN through Secretary Finance and 7 others — Respondents
Court: Islamabad2017 C L D 881
F. No. 153/BAHRIA/C&TA/CCP/2016
Court: Competition Commission of Pakistan2017 C L D 1003
File No. 67/PACRA/C&TA/CCP/2016
Court: Competition Commission of Pakistan2023 C L D 429
F. No. 382/PESCO/C&TA/CCP/2020
Court: Competition Commission of Pakistan2010 C L D 462
File No. 14/DIR (M&TA)/PIA/CCP/09 decided on 3rd November, 2009.
Court: Competition Commission of Pakistan2026 C L D 658
PAKISTAN INTERNATIONAL AIRLINES CORPORATION — Appellant Versus COMPETITION COMMISSION OF PAKISTAN — Respondent
Court: Competition Appellate Tribunal2011 C L D 1417
Show-cause Notice No. 25 of 2010
Court: Competition Commission of Pakistan2019 C L D 188
No. 52/Wateen/C&TA/CCP/2016
Court: Competition Commission of Pakistan