KARACHI: The Competition Commission of Pakistan (CCP) has imposed penalties totalling Rs265 million on two cable manufacturers for restricting dealer pricing, saying the practices undermined competition and consumer choice.
The regulator said it fined one firm Rs75 million and the other Rs190.22 million for engaging in resale price maintenance, in breach of Section 4 of the Competition Act, 2010. The case stemmed from an enquiry initiated after the regulator received documentary evidence, including policy circulars instructing dealers not to offer discounts beyond specified limits. The communications also outlined punitive measures -- including termination of dealership agreements -- for non-compliance.
Following an initial review, the CCP authorised a formal investigation, which found that both companies had imposed minimum resale price restrictions on their dealer networks. One firm enforced discount caps through dealership agreements and retail pricing policies, while the other used rate control notices and related communications to achieve similar outcomes.
The regulator issued show-cause notices and, after hearings and a detailed review of the evidence, concluded that the conduct constituted a restriction “by object”, effectively limiting intra-brand price competition through vertical agreements.
In its order, the CCP said the practices eliminated price competition among dealers of the same brand and adversely affected consumer choice. It added that the restrictions were widely circulated and enforced through coercive measures, including threats of suspension or termination.
In determining penalties, the commission said it had considered the nature, gravity and duration of the violations. One company was noted to have cooperated during proceedings, while the other continued the infringing conduct after the enquiry began and disputed documented evidence.The latter was fined 5.0 per cent of its annual turnover for FY2023-24, amounting to Rs190.22 million.
Both companies have been directed to pay the penalties within 60 days, failing which a further Rs500,000 per day will be imposed until compliance.The regulator also ordered the firms to immediately cease imposing minimum resale price restrictions, withdraw related instructions issued to dealers, and ensure that resale prices are independently determined. A compliance report must be submitted within the prescribed timeframe.
