Cartelisation, abuse of dominance: CCP investigating potential involvement of two float glass manufacturers

ISLAMABAD: Float glass, an important component of the construction sector, is under scrutiny of the Competition Commission of Pakistan (CCP) to investigate possible involvement of two dominant float glass manufacturers in cartelisation and abuse of dominance.

If their involvement in anti-competitive activities is proven, the two glass manufacturers, who dominate over 90 percent of the business, may have hurt consumers badly by increasing the prices of float glass, which is mainly used in the construction sector for manufacturing windows and can also be used for tables and shelves.

A CCP statement said that after receiving various concerns that the undertakings were collectively deciding pricing of float glass and utilization of their production capacities, the Commission started an enquiry. As part of an ongoing enquiry to investigate the prima facie violations of Sections 3 “Abuse of Dominance” and Section 4 “Prohibited Agreement” (Cartelisation) of the Competition Act, 2010 in the glass industry, the CCP’s teams entered and searched the premises of two undertakings on suspicion of their involvement in anti-competitive practices.

CCP’s analysis of data from 2019 to 2021 showed that, for float glass of varying thicknesses, prices of both companies were similar, and the date of price increases and quantum of increase were also the same. CCP also came to know from market sources that the two companies are suspiciously coordinating their prices and production quantities.

During the investigation, market surveys were conducted wherein they informed that both undertakings were in collusion for fixing and maintaining uniform prices and increasing prices in a coordinated manner at the same time.

Any sort of coordination or agreement between competing undertakings to fix prices and supply in the market is classified as prohibited under Section 4 of the Competition Act, 2010.

Since cartels are secretive in nature, Section 34 of the law empowers CCP to enter and search the premises to uncover evidence of collusive activities. Two teams of duly authorized officers of the CCP simultaneously entered and searched the premises of the respective undertakings and seized pertinent record.

The two companies cooperated with the CCP’s search teams in handing over the documents and computer-stored information relating to the possible role of the respective undertakings in the alleged anti-competitive activities. Therefore, the need for forcible entry under section 35 of the Act did not arise.

The CCP is mandated under the Act to ensure free competition in all spheres of commercial and economic activity, to enhance economic efficiency and to protect consumers from anti-competitive practices, including fixation of prices of various goods and services.

Copyright Business Recorder, 2022