The Competition Commission of Pakistan (CCP) is charging very nominal fee for mergers and acquisition as compared to India and other regional countries, which reflects commission''s mandate to reduce the cost of doing business and speed up economic activities in Pakistan.
This was stated by Chairperson CCP Rahat Kaunain Hassan during the question-answer session of the policy roundtable on the new competition regime-implications for business conduct organised by Economic Freedom Network Pakistan here on Friday. Abdul Ghaffar CCP Member (Cartels & Trade Abuses) also responded to different competition related questions.
She informed the private sector and representatives of business and trade community that when compared with India or any other regional state, the CCP charge very low fee for mergers of undertakings. The CCP believes in reducing cost of doing business in Pakistan. However, it is our primary responsibility is to enforce the law to promote local market competition.
Referring to Bangladesh, CCP Chairperson said that Bangladesh has the best code of business practices, but those have never been implemented in true sprit. Thus, both the enforcement and advocacy plays a key role in promoting competition.
During the seminar, she patiently heard to queries raised by participants and explained in detail the concepts of competition and other procedures and working of the CCP. A comprehensive update on the enforcement actions taken by the commission was also shared by the Chairperson CCP.
Responding to a query on price fixation, she said that a major challenge for the CCP is to remove the misconceptions about the commission and educate the common man about the actual powers and jurisdiction of the CCP. "We are not a price regulating agency but our role is to protect consumers from anti-competitive practices. Moreover, we have to correct the dealing of the businesses.
Comparing Pakistani competition law with India, she said that the Indian competition agency has shown poor performance despite the fact that the law is in place for the last many years. The Indian competition is a depressed regime and their agency cannot match in anyway with the CCP. There is no comparison between the Indian and Pakistani competition agency as the former was unable to deliver any thing for the last many years.
To a question of regulating government departments dominating in various areas, she explained that the CCP has always issued policy notes whenever government policies are not correct. However, the competition law does not permit the CCP to take any action against the government departments.
To another question, CCP chairperson clarified that the concept of monopoly is not covered under the Competition Act 2010 and monopoly is not a crime in the new law. On a question whether a developing country like Pakistan requires such competition laws, Rahat Kaunain observed that presently the competition law is applicable over 100 jurisdictions. Such a large number of countries have enforced the competition law.
Mahfooz Illahi President Islamabad Chamber of Commerce and Industry (ICCI) observed that the new competition law has been imposed by CCP on the business and trade. The amount of penalties prescribed in the law shows that the commission is a money making machine, he said.
Strongly responding to the comments, CCP Chairperson observed that the competition law is all about correcting behaviour in the businesses. In the emerging economies, the regulatory body is necessary to check the cartels, collusive behaviour and deceptive marketing practices. However, we do not blindly follow the international competition laws, but modify and adopt best international practices as per our business environment, culture and practices. In the presence of new law, the CCP is able to impose fines on big cartels etc. An important development is that the undertakings have started complying with the law and even in case of jute mills the units have started depositing penalty, reflecting increased level of compliance. The CCP is not working as a sector-specific, but it has to monitor the entire sectors/industries.
Removing apprehensions about the market share, CCP Chairperson further explained that if an undertaking is holding market share like 40-60 percent, it is not a violation of the competition law. In case the unit is involved in abuse of dominance in the market, it is a violation under the competition law, she added.
Ali Salman (Member Economic Freedom Network and Managing Partner Development Pool) welcomed the guests and opened the conference with an introductory note. Olaf Kellerhoff (Resident Representative, Friedrich-Naumann-Stiftung for die Freiheit) thanked the guests and expressed hope that through such debates a harmonious relationship that yields a flexible, creditable, and transparent policy conduct can be engendered. The roundtable was supported by Friedrich-Naumann-Stiftung for die Freiheit.