Industrial cartels fleecing consumers; avoiding CCP action through stay orders: Senate informed


ISLAMABAD Apr 13 (APP): The Senate was informed Thursday that cartels in

cement, automobile and sugar industry are fleecing consumers worth billions of rupees and had taken refuge under the court Stay Orders to avoid action by the Competition Commission of Pakistan (CCP).
Replying to questions related to Finance Ministry, Minister for Law and
Justice, Zahid Hamid informed the house during question hour that CCP has imposed a fine worth Rs 140 million to automobile industry, Rs 6.402 billion to cement industry while the sugar industry owners had got stay order from the court prior to passage of any adverse decision by the CCP.
He informed the House that since its inception in 2007, and in
particular, for the last four years, the Competition Commission of Pakistan (CCP) has been alert against cartels and had taken a proactive role in ensuring that undertakings whose actions prevent, restrict or distort competition are identified and penalized to guarantee all competing entities a level playing field.
The Commission had constantly been enquiring and investigating into
possible violation(s) of the Competition Act 2010 by the companies in all sectors of the economy including Cement, Sugar and Automobile, he said, adding, the CCP investigates “Cartelization” under Section 4 of the Act and ‘Abuse of Dominance’ under Section 3 of the Act.
Zahid Hamid said, the CCP has taken action against the Pakistan
Automobile Manufacturers Authorized Dealers Association (PAMADA) and its members for contraventions of section 4 of the Act.
The CCP found that PAMADA has been operating a price fixing cartel in the market for auto parts, paint jobs, after sale services and agreements on non-hiring of experienced and technical staff.
Therefore, the minister said, the CCP imposed a fine of Rs. 140 million in 2015 on PAMADA for its price fixing cartel.
He said the CCP also took action against M/s Indus Motor Company Limited on finding that the company was found to have ‘abused its dominant position in the terms and conditions set in its Provisional Booking Order (PBO) that were found to have distorted competition by restricting the choices available to potential customers.
However, the matter was disposed of after Indus Motors agreed to revise the terms of its PBO in compliance with the Act.
The minister said the cement industry had the most powerful cartel and it is astonishing that this industry had been fined to the tune of Rs 6.402 billion.
In this case, the minister said, in 2009, the CCP had initiated an action against the All Pakistan Cement Manufacturers Association (APCMA) and its members for contraventions of section 4 of the Act. The CCP found that APCMA has been engaged in output restriction and quota fixation.
Therefore, he informed that the APCMA and its member undertakings were fined a sum of Rs. 6.402 billion. APCMA has challenged the constitutionality of the CCP and the matter is pending adjudication before the Lahore High Court.
About sugar industry, the minister said, in 2009, the CCP initiated an action against the Pakistan Sugar Mills Association (PSMA) and its members after finding that PSMA was engaged in price fixing and allocating and dividing markets across Pakistan in violation of Section 4 of the Act.
He said, the CCP conducted its hearing, however the Lahore High Court restrained the CCP to pass an adverse order against PSMA and its member undertakings. The matter is pending before the court.
The minister said presently more than 100 cases in this regard are pending before different courts in Punjab, Sindh and Islamabad High Court and he had asked the Attorney General of Pakistan to file early hearing petitions for disposal of these cases.