I.

Introduction:

The idea of competition law and policy is of great interest in developed and developing countries
alike, because a competitive economic environment is vital to foster economic efficiency. So this
idea is at the core of discussions in the current scenario. Competition law is a highly complex
area. It calls for a deep understanding and application of the economics of competition on a case-
by-case basis. A high degree of economic and legal sophistication is a prerequisite on the part of
the enforcement agency and the courts and/or specialized tribunals with judicial functions in the
implementation of competition law. The sophistication required is critical as wrong evaluations
can drive decisions the wrong way. A powerful enforcement agency insulated from political,
bureaucratic, and budgetary constraints can make a real difference to the implementation of
competition law. High levels of transparency, administrative and judicial independence are other
essential prerequisites. Adequate financial resources are essential to marshal the necessary
technical and professional expertise in assessing and prosecuting contravention of the law.
In the case of Pakistan, the government pursues the promotion of sustainable economic
development and improvement of well-being of all citizens, with an emphasis on maximizing the
welfare of consumers and producers, by protecting and promoting competition in the economy.
To accomplish these goals, barriers that harm competition, such as cartels, abuses of dominance,
etc, must be eradicated so as to maximize the welfare of consumers and producers. Competition
policy in Pakistan is currently enshrined in the Competition Act 2010. This article aims to:
(1) give an account of the historical evolution of competition law in Pakistan over time,
underscoring the main points of legislation;
(2) identify the institutional structure in charge of applying competition policies, outlining its
form, powers and functions;
(3) Assess the effectiveness of the regulatory agency as a principal authority for the
application of competition policies, with the aim of preventing or remedying possible
anti-competitive conduct.
This article comprises five parts. Part I introduces the topic. Part II focuses on the different
phases Pakistan’s competition law passed through. Part III outlines salient features of the law.
Part IV highlights the institutional framework and details of its working mechanism, powers and
functions, as revealed by the law. Part V contains concluding remarks necessary for the effective
enforcement of the law.

II. Competition law in Pakistan: phases of progression

A. First phase: 1960s – road to MRTPO

The Anti-Cartel Law Study Group was formed and tasked with examining and suggesting
worthwhile policies and measures to prevent the unreasonable growth of monopolies and
restrictive trade practices, at a time when there was a large and flourishing private sector in the
country. The then government encouraged capital formation in the private sector and adopted
policies that helped to fulfill such aims as industrial licensing, industrial credit, and fiscal
concessions. This resulted in economic power being largely concentrated in the hands of a few
family groups which dominated industrial, commercial, banking and insurance activities in the
country. The trend for overall resources to be controlled by a few created a general feeling of
discontent in the country that was not advantageous to the public interest. The Report of the
Study Group therefore ascertained the presence of cartels and monopolies in the country, and
consequently advocated the need for an anti-monopoly law.

B. Second phase: 1970–2007 (MRTPO)

The first competition law became statutory in 1970, through the Monopolies and Restrictive
Trade Practices (Control and Prevention) Ordinance (MRTPO) 1970. The Monopoly Control
Authority (MCA) became the organization to administer this ordinance. The Monopolies and
Restrictive Trade Practices (Control and Prevention) Ordinance was mainly based on the
recommendations made by the Anti-Cartel Laws Study Group. As a result, the government
circulated the draft of the Anti-Monopoly and Restrictive Trade Practices Law for public opinion
with the budget for 1969–70. The draft law was widely commented upon by the press, the
Chambers of Commerce, industry and the public. Taking these comments into account, the
President and Chief Marshall Law Administrator of that time promulgated the Monopolies and
Restrictive Trade Practices (Control and Prevention) Ordinance in February 1970.
The ordinance was a modern piece of legislation at the time it was enacted. It was divided into
six chapters. However, as a result of the changing global and national economic environment, the
MRTPO 1970 proved inadequate in addressing competition issues effectively and revealed
certain chronic deficiencies in the law; some related to the lack of staffing and budget and others
to the lack of legal provisions such as ‘on the spot search’ issues, not covered by the MRTPO70.
Only private monopolies came under the purview of the ordinance, while state monopolies did
not. Furthermore, the definition of ‘services’ was limited: indeed, major areas of services fell
outside the ‘definition’ clause. Some services were covered under sector regulators, such as the
National Electric Power Regulatory Authority established under the Regulation of Generation,
Transmission and Distribution of Electric Power Act 1997 (XL of 1997), the Pakistan
Telecommunication Authority established under the Pakistan Telecommunications
(Reorganization) Act 1996 (XVII of 1996), and the Oil and Gas Regulatory Authority
established under the Oil and Gas Regulatory Authority Ordinance 2002 (XVII of 2002). Hence,
the Monopoly Control Authority’s role in the sectors regulated by sector regulators had been
marginalized. The MCA could only make recommendations to the government for suitable
governmental actions to prevent or eliminate undue concentrations of economic power,
unreasonable monopoly powers, or unreasonably restrictive trade practices. However, in practice
that function of giving advice and recommendations was hampered by the fact that businesses
lying outside the purview of the law were not bound to provide any information to the MCA,
making it difficult to conduct any investigations into the sectors concerned.
The MCA also had very limited penal powers. There were capacity issues regarding the MCA’s
organizational setup that needed to be addressed. Yet the capabilities of staff in any competition
agency may depend on the economic conditions and regulation requirements of the country. This
aspect will also be affected by the degree of priority competition law is given in the
government’s agenda. Most of the agencies in the world utilize the skills of economists,
accountants and lawyers to evaluate cases. The MCA on the other hand had been suffering from
a lack of professional skills. Lack of human, financial and other necessary infrastructure was
another problem that led to picking the issues for analysis/cases on a random basis. That shows
that competition law was not on the priority list of the government’s economic agenda. Steps
were taken to improve the way the MCA worked, including training staff abroad with assistance
from donors, reorganizing the MCA, strengthening its staff’s capacity to achieve a better output,
and streamlining its procedures. However, the 1970s ordinance was outdated and in need of
modernization, so it could be synchronized with a rapidly transforming market economy. The
MCA simply failed to do anything worth mentioning. Whatever its powers, they were not
sufficient to serve the public interest

C. Third phase: 2007–2009 (Competition Ordinance 2007)

In 2005, the Government of Pakistan requested a technical assistance programme to help it
develop the new competition law and policy framework which it realized were needed. These
were to include a government policy statement, a new competition law, and a structure for a new
competition agency to implement the law. Thus, the Ministry of Finance and the MCA worked
with the World Bank and the UK Department for International Development (DFID). As a result
of these efforts, Competition Ordinance 2007 replaced the MRTPO and dissolved the MCA.
The Ordinance 2007 provided for the establishment of the Competition Commission of Pakistan
(CCP) to enable the proper functioning of the law. The regulatory authority was instituted on 12
November 2007 with a mandate to work as an independent quasi-regulatory, quasi-judicial body
aiming to create a business environment based on healthy competition for improving economic
efficiency, developing competitiveness and protecting consumers from anti-competitive
practices. The Ordinance 2007 corrected those deficiencies of the MRTPO related to aspects of
definition, coverage, penalties, and other procedural matters.
In November 2007, a state of emergency was declared in the country. The then Government
issued a Provisional Constitutional Order (PCO) in the Pakistan whereby the Constitution of
Pakistan 1973 was suspended. The validity of the PCO was challenged in the Supreme Court of
Pakistan, and endorsed by a seven-member bench on 15 February 2008. On 31 July 2009 the
Supreme Court, in Sindh High Court Bar Association v Federation of Pakistan, passed a
judgment declaring the PCO to be unconstitutional. Inter alia, 36 ordinances promulgated prior
to 15 December 2007, including the Competition Ordinance 2007, required the approval of
parliament within a period of 120 days. The Competition Ordinance 2007 was tabled in the
National Assembly as the Competition Bill in October 2009. However, it was deferred to
November 2009 as the parliamentary session was suspended when its term was about to expire.

D. Fourth phase: 2009–2010 (Competition Ordinance 2009)

President Zardari revalidated the Ordinance on 26 November 200927 under Article 89 of the
Constitution of Pakistan 1973, which says that the President of Pakistan can promulgate the
ordinance if the Senate or National Assembly of Pakistan is not in session, and the President is
satisfied that circumstances exist which render it necessary for him to take immediate action. The
Ordinance then needs to be approved by parliament within the next 120 days to become law. On
27 January 2010 the National Assembly passed the Competition Bill 2009, which was then
tabled in the Senate on 24 February 2010. The Senate in turn forwarded it to the Senate’s
Standing Committee on Finance to consider the bill in depth and recommend changes. Prior to
that, in March 2009 the CCP requested the Ministry of Finance to start again the process of
promulgation of the Competition Ordinance 2009, which was due to lapse on 26 March 2010 and
had not yet been approved by the Senate. Nonetheless, the Commission was defunct for 22 days
because of the lapse of the Ordinance.

E. Fifth phase: 2010 (Competition Ordinance 2010)

On 18 April 2010, the President of Pakistan once again promulgated the Competition Ordinance
2010. On 5 May 2010, the Senate’s Standing Committee on Finance unanimously approved the
draft of the Competition Bill 2010 with few amendments.
The CO 2010 lapsed on 16 August 2010. CCP as the organization had become a defunct body
after the lapse of the Competition Ordinance 2010. Since the ordinance had been approved by the
Senate’s Standing Committee on Finance, only parliament’s approval was required to grant the
CCP legal status.

F. Final phase: transition from temporary to permanent (Competition Act 2010)

Finally, on 23 September 2010, the Parliament of Pakistan unanimously passed the Competition
Act 2010. Thus the Competition Bill that was presented before the National Assembly of
Pakistan for parliamentary approval in October 2009 had passed through a transition from a
temporary to a permanent phase. It was designed to promote a competitive and fair economic
playing field for the entire corporate sector, while securing economic efficiency and protecting
consumers from anti-competitive attitudes and practices. The title adopted reflects the objectives
and scope of the law, as the Competition Act 2010 is broader in scope and has more extensive
application than the MRTPO 70.

III. Contemporary law: an overview of significant features

The quest to understand competition law has continued for decades. Questions as to its genesis,
underlying ideas, exact role in an economy, and desired benefits for society are significant.
Modern competition law seeks to ensure that the individual’s right: ‘not to be harmed by
violations of competition law’, is well protected. Attempts by different legal systems to provide
individuals’ with freedom to trade and to protect them from restrictions which damage this right
became the basis of the development of the competition regime.
Competition law is designed primarily to protect competition or the competitive process so as to
enhance consumer welfare, guarantee consumers and producers considerable freedom of choice
and action, facilitate a more competitive market where innovation may bring in new products
and processes, and result in an efficient allocation of resources. Nonetheless, the enactment and
implementation of effective competition regimes help to foster competition between firms, thus
improving competitiveness. However, progress in this field indicates that this is not all.
Competition has currently become instrumental in the overall governance and development of
economies for maintaining a balance in trade and development both regionally and globally.
Accordingly, it is a subject of particular relevance.
In the case of Pakistan, the government seeks to promote sustainable economic development and
improve public welfare through its competition policy agenda. To this end, the protection and
promotion of competition in all spheres of commercial and economic activity, primarily through
free play of market forces and efficient allocation of resources in the economy, are prerequisite.
A. Rationale of the law
The Competition Act 2010 is a subset of broader competition policy. The objective of the act can
found in the preamble: to enhance economic efficiency; to protect consumers from anti-
competitive behavior; and to gain the advantages of productive and dynamic efficiency.
The previous law was enacted with the aim of providing measures against the undue
concentration of economic power, the growth of unreasonable monopoly power, and
unreasonably restrictive trade practices. As mentioned earlier, guaranteeing free competition in
all spheres of commercial and economic activity; boosting economic efficiency; and
safeguarding consumers from anti-competitive behavior are the basic objectives of the new law
which are much broader in scope and seem to be more pro-competition in approach as compared
with the MRTPO 70.
B. Anti-competitive agreements
The Competition Act 2010 prohibits any agreement that reduces competition within the relevant
market, whether it is written or oral, formal or informal. This includes any agreement, whether or
not it is unreasonably restrictive or intended to be legally binding. There is a provision in the law
that allows the CCP to stipulate individual and block exemptions from prohibited agreements on
the grounds of efficiency or economic merit. Where arrangements are in writing, no legal
controversy arises as to their existence. However, it is difficult to establish the violation of the
law for enforcement agencies in the absence of written agreement. Enterprises, in most cases,
refrain from entering into written agreements and maintain secrecy by forming cartels. Such
informal or oral agreements intensify the problem of proof, as there is no direct evidence
available. As a consequence such behaviors are proved on the basis of circumstantial evidence. A
further and vital mode of establishing the existence of an oral agreement is by the direct
testimony of witnesses, since enforcement agencies need to be able to determine that some form
of communication or knowledge-sharing of business decisions has taken place among
enterprises, leading to the formation of cartels.
Over the years, the competition authorities have devised various tools and methods to break
cartels. However, the leniency programme is the most effective worldwide tool, helping
competition authorities to detect cartel infringements by providing cartel members with a strong
incentive to inform on their co-conspirators. The Competition Act 2010 authorizes the
Competition Commission of Pakistan to initiate leniency provision in case of a breach of Chapter
2 stipulations of the law by imposing lower penalties on the undertaking that is ‘a party to a
prohibited agreement’, but provides vital information to the commission regarding the alleged
violation that can help the commission to proceed against such anticompetitive agreements. It is
worth mentioning here that the law enforcement environment is the key to a successful leniency
programme, such that any business entities that enter into or continue to engage in cartel activity
recognize that they are highly likely to be uncovered by the competition authority.

C. Abuse of dominance
The notion of abuse of a dominant position of market power refers to those anticompetitive
business practices in which a dominant organization may engage in order to maintain or increase
its position in the market. All developed competition jurisdictions such as the UK, Canada,
France, Germany and the EU prohibit such practices.
Such anti-competitive business practices are concerned with having a dominant position in the
market and the ability to exploit market power. However, it is a fact that a dominant position in
itself is not anti-competitive. Concerns are usually raised when a dominant organization has the
capacity to set prices independently and abuse its market power. The abuse of a dominant
position of market power leads to prices higher than competitive prices, reduced output, reduced
quality of service, lack of innovation in relevant markets, and loss of economic welfare.
The Competition Act 2010 focuses on the abuse of dominance and does not pursue how to curtail
or reduce a dominant position. Although there is presumption of dominance where the market
share exceeds 40% of the share of the relevant market, the presumption of dominance is not
culpable as it does not suggest in any way that dominance is being abused. It is worth mentioning
here that the clause defining ‘dominant position’ under the Competition Act 2010 not only refers
to a dominant position of market power of one business but also to the situation where two or
more businesses acting together might exercise control. Such a situation requires analysis on a
case-by-case basis in order to establish whether the acts or behavior of an organization or
organizations involve abuse of a dominant position of market power in terms of their purpose
and effect on the actual situation.

D. Mergers
UNCTAD Model Law defines a merger as a: ‘fusion between two or more enterprises
“previously independent of one another” whereby the identity of one or more is lost and the
result is a single enterprise’. Merger and acquisition activities are considered one of the biggest
perils to competition, since they enable a few or a single enterprise to control the dynamics of
competition in the market. However, not all mergers and acquisitions fall within the purview of
the law. Most jurisdictions with merger control systems apply various tests to examine the
validity of mergers, such as the market share test. Generally these tests originate from the
jurisdiction’s doctrines vis-à-vis dominance or restraint. Some jurisdictions prefer to develop a
separate test, keeping in view the actual or potential effect of the merger on competition and the
competitive process. Most systems stipulate procedures for pre-merger notification to the
enforcement authorities, in order to identify and resolve any problems before the merger takes
place. The Competition Act 2010 also stipulates that beyond certain limits all the desired
combinations must be approved by the Competition Commission.
The Competition Commission of Pakistan under Competition (Merger Control) Regulations
2007 (Regulation 2007) prescribes a threshold beyond which merger parties must get clearance
from the Commission of any intended merger. As a result, every proposed merger does not need
clearance from the Commission unless the value of ‘gross assets’ of the business is not less than
300,000,000 rupees excluding the value of its goodwill; and/or the combined value of the
organizations whose shares are to be acquired or which are proposed to be merged is not less
than one billion rupees;64 or the ‘annual turnover’ of the business in the preceding year is not
less than 500,000,000 rupees and/or the combined turnover of such businesses is not less than
one billion rupees. It offers rules for pre-merger control with a rationale to ensure efficiency,
lucidity and certitude in the merger control mechanism. It further stipulates comprehensive
procedures for review and clearance of mergers that meet the thresholds prescribed by the
Commission and notified under the rules.

E. Deceptive marketing practices

The law under Section 10 prohibits deceptive marketing practices. Deception can be in the form
of misrepresentation, omission, or misleading practice in promotional agendas, communications,
advertising, and customer service, thus contaminating the entire market. The Office of Fair
Trading (OFT) was set up within the Competition Commission of Pakistan on 7 July 2008. The
OFT has an online complaint provision. A preliminary investigation is initiated upon receipt of a
complaint following the formal enquiry under Section 37 of the law, provided the initial probe
verifies the matter to which the complaint relates. The outcome of the enquiry determines
initiation of proceedings under Section 30, i.e. a show cause notice (where the commission gives
notice to the parties concerned regarding its intention to make order, and which also includes the
reasons on which the order is based) followed by hearings and concluded through an order that is
then published in the official Gazette for public information.

IV. Enforcement agency – its structural framework, powers and functions: a new
version and intrinsic challenges

A. Structural framework
The most efficient type of administrative authority for competition enforcement is expected to be
one that is quasi-autonomous or independent of the Government, with strong judicial and
administrative powers for conducting investigations and applying sanctions ...
The CCP is a legal framework principally liable for the implementation of competition laws,
providing aid to ensure healthy competition, and developing competition culture within the
country.
Analysis of the structural framework of any organization needs to satisfy specific queries
regarding its internal transparency, external transparency, and the impact of its structure on
output. There are various approaches to designing the competition authority. Some prefer to
entrust the powers of the authority in a single individual, for example in the Competition Bureau
Canada where the formal powers are actually exercised by the Commissioner of Competition.
However, it has become generally standard to establish a commission consisting of several
individuals, or a corporate body with a board of directors or members. Therefore, a different
model is considered appropriate, rather than the exercise of power by just one individual. In the
UK, the Enterprise Act established the OFT as a statutory corporation on 1 April 2003, headed
by a board consisting of a chairman, an executive director and five non-executive members.
There is also a Competition Commission in the UK that is an independent public body vested
with powers to conduct inquiries into mergers and further authorized to take decisions in relation
to certain matters, particularly in relation to mergers. Members of the commission are not
recruited directly, but are appointed after an open competition by the sponsoring body, the
Department for Business, Innovation and Skills. In the European Union, the Commission is both
the institution and the college of commissioners, consisting of one commissioner from each of
the Member States, and they are collegiately responsible for decisions.
In the case of Pakistan, the law declared the Competition Commission a legal personality and
emphasized its administrative and functional independence. The manner in which members of
the authority and staff are to be appointed, their tenure and removal in addition to the mode of
financing the authority, power and functions of the members, as prescribed by statute, usually
signifies the authorities’ functional autonomy. Questions arise on the process for recruitment and
selection of members. The law clarifies the aspect of composition of the commission by defining
the upper and lower limit of its members. At the same time the law authorizes the federal
government to increase or decrease the number of members whenever it deems appropriate. But
there is no clear procedure for recruiting and selecting members under the CA 2010. It is
recommended that a selection committee for making recommendations for selecting a
chairperson or members should be defined under the law. Moreover, authorities are suggested
who should invite applications from eligible candidates for engagement as experts/professionals
in the field of law to assist the Commission in discharge of its functions.
Competition authorities are expected to maintain an unbiased and transparent approach in a
decision-making process that is possible only if the authority is insulated from undue political
interference. To this end, it is recommended that the Government of Pakistan relinquish its
control over the regular functions and decision-making processes of the authority. The MRTPO
70 did not provide any qualification criteria for the selection of the Authority, and as a result
senior officers with no relevant background have been posted in the MCA. The leaders in any
organization can create and sustain the sense of mission, passion and commitment to fulfill the
goals of that organization, and the same is true for the competition authority. If members from an
unrelated background are posted to the competition agency, they will not be able to contribute
effectively to the building process of the organization, as they do not comprehend the essence of
the organization that is to promote the competition culture. The Act 2010 lays down eligibility
criteria for the appointment of members of the board, but the decisive powers regarding
qualification, experience and mode of appointment of the members are again conferred on the
federal government.
The lack of a systematic approach under the MRTPO 70 hindered the analysis of various sectors
of the economy. As a result, there have not been many sectorial research work/studies, hence a
systematic approach could not flourish. However, the CCP has commenced sectorial research
studies. The MCA’s budget met only the pay and allowances of the employees; therefore, their
research efforts remained limited in coverage. Due to funding constraints, the services of high-
profile legal experts could not be obtained to represent the organization at the level of appeal.
Secure sources of income are a prerequisite for an independent competition agency, insulated
from political pressures, to perform its work without having to resort to endowments from the
government budget. The Competition Act 2010 permitted the establishment of the CCP Fund as
part of the CCP, and as a source of income utilized by the authority. This fund consists of grants
and funds allocated by the government, fees and charges levied by the Commission, donors’
contributions, income generated by the authority from its own investments, and a percentage of
the fee and charges levied by other regulatory authorities in Pakistan. The functional
independence of the authority is counterbalanced by strict standards of accountability. The law
ensures the CCP is accountable by making it obligatory upon it to produce an annual financial
statement that is to be audited by the Auditor General of Pakistan or its authorized nominee. In
the same manner, the authority is required to prepare annual reports. Both these documents must
be sent to the Federal Government within a specified time period, for publication in the official
gazette and to be placed before parliament. However, the biggest challenge is to maintain the
optimum balance between autonomy and control that is the key to facilitating the output of an
organization.

B. Powers and functions

The MCA under the MRTPO 70 had no power to grant leniency or a reprieve, which are being
used as effective tools by the majority of developed competition agencies in other countries. Nor
could it conduct dawn raids to gather evidence. The Competition Act 2010 authorizes the
Competition Commission to delegate the power to any officer of CCP to enter and search
premises ‘for the purpose of enforcing any provision of the Law’. However, entry into premises
may be subject to certain conditions. For example, in some jurisdictions a court order is required
for entry into private dwellings, while in others, searches can be conducted without warrant,
provided certain other requirements are fulfilled such as if there is ‘danger in delay’. In the same
manner the Competition Act 2010 ensures that this power is not misused by the officials of the
CCP, hence reasonable grounds are required to be maintained in writing before taking action. In
case ‘enterprise without reasonable cause’ hinders the CCP’s officer or valuer from exercising
the powers under section 34 of the Act, the law allows an investigating officer to enter premises
forcibly. The law also provides a safeguard that the provision is used in juridical manner by
making it obligatory for the investigating officer to get the written order of the Commission
signed by any two members. Where a person thinks himself aggrieved, he may file a complaint
against the investigating officer and if, by conducting an enquiry according to the rules, it is
found that the investigating officer acted vexatiously, in excess of his powers or in bad faith, he
will be dismissed from the service and bear other consequences as mentioned in the law.
As noted earlier, the law enforcement authorities often face difficulties in establishing the
existence of cartels and proving that the law has been broken, as a result of the nature of cartel
agreements. Co-operation from businesses or individuals implicated in cartels has emerged as a
beneficial mechanism which enables the authorities to detect and prohibit such practices. Such
businesses or individuals are rewarded by being granted immunity from any fine where they are
willing to end their participation, independently of the rest of the organizations involved in the
cartel. Thus, competition authorities operate leniency programmers effectively worldwide for
detecting cartel infringements. In the same manner, the Competition Act 2010 also explicates the
leniency provisions. The Commission may offer full leniency as well as partial leniency,
depending on the case. Moreover, the substantive law does not provide any enabling provision
relating to the early resolution of matters by methods of ‘settlements’ or ‘plea bargaining’, as is
used in some of the developed competition jurisdictions such as EU. The Competition Act 2010
only stipulates ‘granting of lesser penalty or leniency’.
The levels of the penalties under the MRTPO 70 were very low compared with those of other
countries. At the same time, the MCA could only impose penalties for not carrying out its orders.
It was beyond the MCA’s jurisdiction to impose penalties for breaching competition law, thereby
encouraging businesses to pay the penalties and continue their abusive practices. Penalties under
the Competition Act 2010 are not only comparatively higher, they also cover instances of any
breach of the competition law as well as any disregard of the CCP’s orders. The Competition Act
2010 has specified maximum sanctions such as ‘for non-compliance of any order, notice or
requisition of the Commission an amount not exceeding one million rupees, as may be decided in
the circumstances of the case by the Commission’; ‘for knowingly abuses, interferes with,
impedes, imperils, or obstructs the process of the Commission in any manner, an amount not
exceeding one million rupees as may be decided in the circumstances of the case by the
Commission’. Where it is ascertained that the organization has been involved in infraction of the
law, the Commission is authorized to impose penalties calculated on the basis of the facts of the
case. The maximum sanction for a contravention would not exceed an amount of 75,000,000
rupees or an amount not exceeding 10% of the annual turnover of the organization, as may be
decided in the circumstances of the case by the Commission. Thereby, the agency has a broader,
progressive and wider domain. The law clearly specifies the modes of recovery of the penalties.
The Commission, under the Competition Act 2010, has the power to make rules, with the
approval of the Government of Pakistan, for all or any of the matters in which it is required to
make rules or for the purpose of implementation of the law.

C. Competition advocacy
Competition advocacy is a requisite for any manoeuvre to improve a country’s competitiveness.
Competition advocacy is defined by the World Bank as ‘the ability of the competition office to
provide advice, influence and participate in government economic and regulatory policies in
order to promote more competitive industry structure, firm behavior and market performance’.
The International Competition Network’s (ICN) definition of competition advocacy is: ‘activities
conducted by the competition authority related to the promotion of a competitive environment
for economic activities by means of non-enforcement mechanisms, mainly through its
relationships with other governmental entities and by increasing public awareness to the benefits
of competition’. Advocacy is an ongoing process, and can be used as an effective tool to apprise
the desirability of competition policies and advocate reforms in market disciplines. Successful
advocacy contributes to the intensification of the agency’s reputation among stakeholders,
promoting good competitive practices in the marketplace. Such a culture is indeed an essential
precondition for deriving the benefits of competition and its contribution to furthering economic
development by ensuring the efficient allocation of resources in an economy.
The Competition Commission of Pakistan, realizing the demands and urgency of the present
situation, is attempting to build a competition culture through advocacy. In this regard the CCP
focuses on disseminating information to and bringing awareness among stakeholders, including
the government, industry, media, businesses, and civil society, concerning the need and
implementation of competition law.
In the fast-growing global situation, the competition authority’s active involvement in the
legislative process is expressly attributed to the competition law regimes of many countries. The
CCP is specifically mandated to scrutinize legislation that will distort competition, and in this
regard it has submitted its policy notes and opinion on government programmes, policies,
decisions, proposed regulatory reforms and projects.

D. Promoting a culture of compliance: Voluntary Competition Compliance Code 2010

Unconventional and progressive ways are necessary for the ingenious enforcement of
competition laws. Investigation procedures entail a huge budget that is counted as a waste of
financial resources. Additionally there is the risk of punishment, surcharges for violations, legal
costs incurred while cases in courts are pending, and, most importantly, such consequences as
damage to the corporate image. But by voluntarily complying with competition laws and
regulations, the social costs which result from enforcement of the law are minimized.
The Commission has launched a Voluntary Competition Compliance Code, after reviewing
guidelines provided by the US, UK, Canada, India and Singapore as a model, to encourage
voluntary compliance with the Competition Act 2010. The code is designed to promote
compliance with Pakistan’s competition law and policy among businesses and their employees,
and to highlight the advantages of voluntary compliance, thus making markets competitive for
the benefit of both businesses and consumers, and initiating a healthy culture of compliance in
the country.

V. Concluding remarks
Competition law is generally needed to protect against anti-competitive practices and to nurture
free competition in the market, hence promoting the competition in the market and to safeguard
consumers against unfair means adopted by firms. Competition legislation is therefore necessary
to regulate business, ensure consumer and producer welfare, and promote the healthy growth of
the economy and social justice. Accordingly, a system of competition law which shields the
process of competition entails establishing a powerful, robust and independent competition
authority to ensure improved economic performance. The Competition Act 2010 sets out ‘the
principles and norms of sound competitive behavior as well as the manner in which these norms
are to be enforced. It provides a legal framework in which a business environment based on
healthy competition towards improving economic efficiency, developing competitiveness and
protecting consumers from anti-competitive practices is to be created’.
To improve the effective enforcement of the Competition Law 2010, this article makes a few
recommendations.
(i) There should be a transparent process of recruitment and selection of members. Clear,
qualitative criteria for the appointment of members of the authority should be applied
in a non-discriminatory manner.
(ii) It is valuable to design the appointment process in a manner that assists the selection
of fair and impartial people who can sustain political pressures. The committee for
making recommendations for the selection of chairperson or members should be
defined under the law, thereby securing appointment on merit, independent of the
political situation of the country, as it is undesirable that the members can be removed
from office in the event of a change of government.
(iii) The government, learning lessons from the previous law, should relinquish its control
over the regular functions and decision-making processes of the authority and allow it
to work independently.
(iv) Experts/professionals in the field of law should be engaged to assist the Commission
in discharging its functions on the basis of merit.
(v) It is productive to familiarize students from economics, law, management and finance
with the Competition Law and its provisions, and to impart training on competition
and related issues.
(vi) An initiative should be undertaken to provide internships to students in the field of
competition law and policy.
(vii) Workshops need to be organized in association with different competition authorities
in the developed world regarding planning and conducting investigations into the
abuse of dominance, restraints of trade, mergers and other aspects of competition law.
(viii) Adoption of a mandatory consultation mechanism with the competition authority in
legislative and regulatory procedures would also be beneficial.