KARACHI: The Competition Commission of Pakistan (CCP) has recovered Rs40 million in collective penalties from two companies after a tribunal upheld findings that they entered into an anti-competitive agreement that restricted market competition.
The CCP said the fines were imposed for a non-compete arrangement that effectively removed one firm from distributing human pharmaceutical products in the country for three years.The Competition Appellate Tribunal (CAT) upheld the regulator’s earlier ruling, affirming that the agreement amounted to a prohibited market-sharing arrangement under the Competition Act, 2010.
The case stemmed from a disclosure to the Pakistan Stock Exchange (PSX), which showed that one company had agreed to halt distribution activities in exchange for a payment of Rs1.131 billion from the other. The regulator said the payment acted as a financial incentive for market exit, reducing competitive pressure and distorting market dynamics.
The commission found that the agreement created barriers to entry and undermined competition in the relevant market. Although the arrangement included a clause requiring regulatory approval, the companies failed to secure prior clearance and sought exemption only after receiving show-cause notices.The regulator rejected the exemption request, stating that the agreement did not meet the legal criteria and that the violation had already occurred.
