ISLAMABAD: The Competition Commission of Pakistan (CCP) has not found any dominant position of any individual company or collective/group of companies in the relevant markets of two major sectors, ie, sugar and cement where cartelization has been detected by the commission.
A comparison of the CCP's enquiry reports of the sugar and cement sector revealed that the abuse of dominance in terms of Section 3 of the Competition Act has not been found in both the cement and sugar sectors.
The enquiry report of the CCP on cement sector stated that for an abuse of dominance by an undertaking to take place, it has to be established at the very outset that the undertaking alleged of the same is deemed to have a dominant position in the relevant market.
As per the Act, an undertaking is deemed to have a dominant position, if it has the ability to behave to an appreciable extent, independently, of its competitors, consumers and suppliers or it is presumed to be dominant if its market share exceeds 40 percent in the defined relevant market.
The dominance of an undertaking is to be established by analyzing the market shares in the relevant market i.e. the quantity of cement sold in Pakistan and quantity of cement exported outside Pakistan by the cement companies.
From data presented above, it appears that no individual undertaking holds dominant positioning in terms of its market share in the relevant market in Pakistan and in relevant market of exports, report added.
Therefore, the analysis of anti-competitive conduct with respect to collective abuse of dominance is not applicable for the case at hand, the CCP added.
The CCP's enquiry report on sugar sector stated it appears that no mill/group of companies holds a dominant position individually or collectively in terms of Section 2(1)(e) of the Competition Act.
For assessing dominance in terms of provisions of the Act, any individual player with a share of 40 percent or above is presumed to hold a dominant position.
However, for the sugar milling business in Pakistan no single company or single group of companies seems to meet the threshold for dominance.
Another test for dominance is to assess whether any undertaking is capable of acting independently of its competitors, consumers or suppliers.
From evidence available on the record, it appears that neither an individual undertaking nor a single group of companies can be termed as having acquired a dominant position.
Based on the available facts and given circumstances in the absence of any individual or collective dominant position in the relevant market, the question of abuse of dominance in terms of Section 3 of the Act for the purpose of this enquiry does not arise, the CCP report added.
Copyright Business Recorder, 2020
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