Enforcement activities: CCP achieves a major breakthrough

The Competition Commission of Pakistan achieved a major breakthrough in enforcement activities when a large business association admitted of operating as a cartel and requested the Commission to take lenient view in the imposition of penalty.
Sources in the CCP told Business Recorder on Tuesday that it is a big achievement of the Commission for providing ample evidence to a leading business association which proved cartelisation and subsequently the concerned association admitted its mistake.
This enforcement action taken by the CCP is first of its kind under supervision of Chairperson Rahat Kaunain Hassan where cartelisation has been admitted by the association for having soft corner of the Commission. This also speaks of in-depth research done by the CCP to underline cartels who have no way out but to admit their wrongdoings ie violations of the Competition Laws.
According to sources, cartels are anti-competitive agreements carried out in unison by firms, mostly under the aegis of business associations, aimed at increasing individual members'' profits by reducing competition, and are considered anti-consumers'' marring country''s economic growth. However, it takes the anti-trust agencies usually years to bust cartels.
They said that the Pakistan Jute Mills Association, and under its umbrella 10 Jute Mills, admitted before a two-member bench of CCP for being involved, albeit inadvertently, in collusive activities vis-à-vis production and supply of Jute Bags. The two-member Bench, comprising the Chairperson Rahat Kaunain Hassan and Member Vadiyya Khalil, while taking lenient view, imposed a total penalty of Rs 23 million on Pakistan Jute Mills Association and 10 Jute Mills for engaging in collusive activities vis-à-vis production and supply of Jute Bags.
The CCP bench appreciated the manner in which PJMA and Jute Mills have made a full disclosure of facts and have admitted their non-compliance although inadvertently. While it is hackneyed law that ignorance or inadvertence of such nature is no resolute defence, the candid and co-operative approach taken by the parties in identifying aspects that impede the development of a level playing field deserves due consideration.
"It is a stated objective of this Commission that it is implementing the applicable competition law and policy with the view of promoting business rather than disrupting, discrediting or discouraging it," the order said adding that PJMA and jute mills have demonstrated their commitment to inculcating and establishing an environment of compliance with the underlying theme of the competition law. "Having come clean on this undertaking, the Commission is inclined to show some leniency in terms of the penalty that should be imposed for violations above noted."
The CCP bench observed that the enactment of the Act, perhaps, embodies a most striking recognition that anti-competitive practices in fact exist and are pervasive across sectors of the state economy. The legislative mandate entrusted to this Commission is not limited to detection of anti-competitive practices and imposition of penalties on violators of the law.
It is also about achieving corrective behaviour so that an enabling environment for a free, fair and competitive market is established for the greater benefit of all, particularly the businesses and their consumers. Such an environment can only become a reality if businesses, relevant regulatory bodies, intermediary organisations and all others concerned espouse attitudes conducive to such environment. Considering that the PJMA and the Jute Mills have assured corrective behaviour in the conduct of their respective businesses.