Rs 100 million fine on PPA for collusive activities, cartelization: Competition Appellate Tribunal upholds CCP's decision

The Competition Appellate Tribunal has upheld an order of Competition Commission of Pakistan (CCP) that had imposed Rs 100 million penalty on Pakistan Poultry Association (PPA) for its involvement in collusive activities and cartelisation. Sources told Business Recorder that Competition Appellate Tribunal has passed the order upholding CCP's imposition of Rs 100 million penalty on the PPA.
The Competition Appellate Tribunal is the legal forum where appeals can be filed by the companies/entities against the orders passed by the CCP under the Competition Act, 2010. The Tribunal was established under Section 43 of the Competition Act and is currently headed by former Justice Fasih-ul-Mulk, while former Justice Miftah-ud-Din and Ahmed Owais Peerzada are its members.
In a major development, the tribunal has passed the order in favour of CCP in an appeal filed by the Pakistan Poultry Association in a cartel case. The tribunal has also upheld the penalty of Rs 100 million imposed by CCP on the association for cartelisation. The PPA had filed an appeal with the tribunal against the order passed by CCP in which the association was fined Rs 100 million for engaging in collusive activities.
The tribunal entirely confirmed the CCP's assessment of the cartel activities led by the PPA. It also confirmed that exchange of strategic data and commercially sensitive information leading to horizontal price-setting through an association is anti-competitive by its very object and amounts to a violation of section 4 of the Competition Act.
The tribunal order said: "In the given circumstances, after analysing the relevant facts and material available on record, the tribunal has come to the conclusion that the findings recorded by the CCP are based on proper appraisal of relevant provisions of the Competition Law as well as other material brought on record. The same are, therefore maintained."
On February 09, 2016, the Commission's bench comprising Chairperson Vadiyya Khalil and Members Ikram-ul-Haque Qureshi and Dr Shahzad Ansar imposed a financial penalty of Rs 100 million for fixing the prices of live boiler chicken, boiler chicken meat and chicken eggs.
The Commission held that fixing the selling price of boiler chicken and chicken eggs has the object/effect of preventing, restricting or reducing competition in the relevant market in violation of Section 4(1) read with Section 4(2)(a) of the Act. Furthermore, the PPA was ordered to immediately stop from advertising the rates of poultry products and file a compliance report with the Commission within two months of the issuance of the order.
It is a well established principle of competition law that not only formal and informal price-fixing agreements, understandings and decisions but also exchange of commercially sensitive information and setting prices, among other things, among the competitors by themselves or through the medium of their association(s) reduces uncertainty for each of the participant as to the conduct of their competitors, which results in restriction of competition by object and ultimately harms the consumer. It is noted that the Commission is entitled to assume that competing businesses take account of the information exchanged in determining their conduct, and there is no need to show an actual effect on competition, the CCP added.