Commonwealth Law Bulletin

ISSN: 0305-0718 (Print) 1750-5976 (Online) Journal homepage: http://www.tandfonline.com/loi/rclb20

Competition law in Pakistan: brief history,

aspirations and characteristics

Sayyeda Fatima

To cite this article: Sayyeda Fatima (2012) Competition law in Pakistan: brief history,
aspirations and characteristics, Commonwealth Law Bulletin, 38:1, 43-62, DOI:
10.1080/03050718.2012.646734

To link to this article: http://dx.doi.org/10.1080/03050718.2012.646734

Published online: 29 Mar 2012.

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Commonwealth Law Bulletin
Vol. 38, No. 1, March 2012, 43–62

Competition law in Pakistan: brief history, aspirations and

characteristics1
Sayyeda Fatima*

Vrije Universiteit Brussel, Belgium and International Islamic University Islamabad, Pakistan

This article highlights various aspects of competition law in Pakistan. It aims

to give an account of the historical evolution of competition law in Pakistan
over time, underscoring the salient characteristics of legislation; to identify
the institutional structure in charge of applying competition policies, featur-
ing its form, powers and functions; and to assess the effectiveness of the reg-
ulatory 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 has passed
through. Part III outlines salient features of the law. Part IV highlights the
institutional framework with detailed working mechanism, powers and func-
tions as revealed by the law. Part V contains concluding remarks necessary
for effective enforcement of the law.

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 cur-
rent 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 both the enforcement agency and the courts and/or specialised tribu-
nals 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, bureau-
cratic, and budgetary constraints can make a real difference to the implementa-
tion 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 assess-
ing 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 maximising the welfare of consumers and producers, by protecting

*Email: sayyeda.iiu@hotmail.com
1
Parts of this article are excerpts from the author’s PhD thesis at Vrije Universiteit Brussel
funded by EMECW.

ISSN 0305-0718 print/ISSN 1750-5976 online

Ó 2012 Commonwealth Secretariat
http://dx.doi.org/10.1080/03050718.2012.646734
http://www.tandfonline.com
44 S. Fatima

and promoting competition in the economy.2 To accomplish these goals, barriers

that harm competition, such as cartels, abuses of dominance, etc, must be eradi-
cated so as to maximise the welfare of consumers and producers. Competition
policy in Pakistan is currently enshrined in the Competition Act 2010.3
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 poli-
cies, 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 Group4 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.5 The then government encouraged
capital formation in the private sector and adopted policies that helped to fulfil
such aims as industrial licensing, industrial credit, and fiscal concessions.6 This
resulted in economic power being largely concentrated in the hands of a few
family groups which dominated industrial, commercial, banking and insurance

2
See Competition Policy Report, ‘A Framework for a New Competition Policy and Law:
Pakistan’ (The World Bank, August 2007) p iii <http://www.cc.gov.pk/images/Downloads/
Competition_Policy_Report.pdf> accessed May 2011.
3
The Competition Act No XIX of 2010 (published in the Gazette of Pakistan, Extraordi-
nary, 13 October 2010) (hereinafter CA 2010).
4
The Anti-cartel Laws Study group was set up by the Government of Pakistan in 1963
in pursuance of announcement made by the Finance Minister in his budget speech for
fiscal year 1963–64.
5
See <http://www.planningcommission.gov.pk/five%20year%20plans/4th/4th5yPlanCH-6
editing.pdf> accessed September 2011.
6
Ibid.
 Commonwealth Law Bulletin 45

activities in the country.7 The trend for overall resources to be controlled by a

few created a general feeling of discontent in the country that was not advanta-
geous to the public interest.8 The Report of the Study Group therefore ascer-
tained 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) 1970.9
The Monopoly Control Authority (MCA)10 became the organisation to adminis-
ter 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.11 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 com-
ments 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 1970.12
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 address-

7
M Haq, The Poverty Curtain: Choices for the Third World (Columbia University Press,
New York 1974).
8
For further details see GF Papanek, Pakistan’s Development: Social Goals and Private
Incentives (Harvard University Press, Cambridge 1967); see also R Amjad, ‘Impact of
Concentration on Profitability in Pakistan’ (1977) 13/4 J Devel. Stud.; further see L
White, Industrial Concentration and Economic Power in Pakistan (Princeton University
Press, Princeton, NJ 1974).
9
Monopolies and Restrictive Trade Practices (Control and Prevention) Ordinance NO. V
OF 1970 (Published in the Gazette of Pakistan, Extraordinary, 26 February 1970) (herein-
after MRTPO 70).
10
Ibid. s 8 (hereinafter MCA).
11
The Anti-cartel Laws Study group (n 3) submitted its report in April 1964.
12
The genesis of this legislative measure might be found in the Fundamental Rights and
Principles of Policy enunciated in the then Constitution 1973 that reads as follows:
Article 18: Subject to such qualifications, if any, as may be prescribed by law, every
citizen shall have the right to enter upon any lawful profession or occupation, and to
conduct any lawful trade or business:
Provided that nothing in this Article shall prevent
b) The regulations of trade, commerce or industry in the interest of free competition
therein.
Article 38: The state shall
a) secure the well-being of the people, irrespective of sex, caste, creed or race, by
raising their standard of living, by preventing the concentration of wealth and
means of production and distribution in the hands of a few to the detriment of
general interest and ensuring equitable adjustment of rights between employers
and employees, and landlords and tenants.
See the Constitution of Pakistan 1973, Ar: 18 and Ar: 38.
46 S. Fatima

ing 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 MRTPO
70. Only private monopolies came under the purview of the ordinance, while
state monopolies did not.13 Furthermore, the definition of ‘services’ was limited:
indeed, major areas of services fell outside the ‘definition’ clause. Some services
were covered under sector regulators,14 such as the National Electric Power
Regulatory Authority established under the Regulation of Generation, Transmis-
sion and Distribution of Electric Power Act 1997 (XL of 1997), the Pakistan
Telecommunication Authority established under the Pakistan Telecommunications
(Reorganisation) 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 sec-
tors regulated by sector regulators had been marginalised. 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 prac-
tice 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 pro-
vide any information to the MCA, making it difficult to conduct any investiga-
tions into the sectors concerned.
The MCA also had very limited penal powers. There were capacity issues
regarding the MCA’s organisational setup that needed to be addressed. Yet the
capabilities of staff in any competition agency may depend on the economic con-
ditions 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 utilise the skills of economists, accoun-
tants and lawyers to evaluate cases. The MCA on the other hand had been suffer-
ing 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 improved
the way the MCA worked, including training staff abroad with assistance from
donors, reorganising the MCA, strengthening its staff¨s capacity to achieve a bet-
ter output, and streamlining its procedures. However, the 1970s ordinance was
outdated and in need of modernisation, so it could be synchronised with a rapidly
transforming market economy. The MCA simply failed to do anything worth men-
tioning. 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
realised were needed. These were to include a government policy statement, a
13
See n 8, MRTPO 70, s 25.
14
The Ordinance of 1970 covered ‘transport, provision of board, lodging, entertainment
or amusement, supply of electrical or other energy – then with Sector regulator NEPRA,
purveying of news – with Sectorial regulator PEMRA, banking, insurance or investment’.
See n 8, MRTPO 70, s 2 (1) (j).
 Commonwealth Law Bulletin 47

new competition law, and a structure for a new competition agency to implement
the law.15 Thus, the Ministry of Finance and the MCA worked with the World
Bank and the UK Department for International Development (DFID).16 As a
result of these efforts, Competition Ordinance 200717 replaced the MRTPO and
dissolved the MCA.18
The Ordinance 2007 provided for the establishment of the Competition Com-
mission of Pakistan (CCP) to enable the proper functioning of the law.19 The
regulatory authority was instituted on 12 November 200720 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 effi-
ciency, developing competitiveness and protecting consumers from anti-competi-
tive practices.21 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.22 The validity of the
PCO was challenged in the Supreme Court of Pakistan, and endorsed by a
seven-member bench on 15 February 2008.23 On 31 July 2009 the Supreme
Court, in Sindh High Court Bar Association v Federation of Pakistan,24 passed a
judgment declaring the PCO to be unconstitutional. Inter alia, 36 ordinances pro-
mulgated prior to 15 December 2007, including the Competition Ordinance
2007, required the approval of parliament25 within a period of 120 days. The

15
See Competition Policy Report, ‘A Framework for a New Competition Policy and Law:
Pakistan’ (The World Bank, August 2007) p iii <http://www.cc.gov.pk/images/Downloads/
Competition_Policy_Report.pdf> accessed April 2011.
16
Ibid.
17
The Competition Ordinance of 2007 (CO 2007) was promulgated by the President of
Pakistan under art 89(1) of the Constitution of Pakistan, on 2 October 2007.
18
The Competition Ordinance No LII of 2007 (published in the Gazette of Pakistan,
Extraordinary, 2 October 2007) (CO 2007).
19
Ibid. CO 2007, s 12.
20
The federal government issued the notification regarding the establishment of the CCP
and appointment of its five members, including the Chairman of the Commission. See S
Chaudhry, ‘Government Proposes Five Names for CCP Chairman, Members’ The Daily
Times (19 October 2007) <http://www.dailytimes.com.pk/default.asp?page=2007/10/19/
story_19-10-2007_pg5_4> accessed 8 June 2011.
21
See <www.cc.gov.pk> accessed September 2011.
22
Provisional Constitutional Order of 2007 (PCO) exempted CO 2007 along with other
ordinances, as per Clause 5(1) & (2), from ‘any limitations as to duration prescribed in
the Constitution’. See Provisional Constitution Order No. 1 of 2007, issued 3 November
2007, amended 15 November 2007.
23
See Tikka Iqbal Muhammad Khan and others v General Pervez Musharraf [2008] PLD
SC at 178.
24
[2009] PLD SC at 879.
25
Article 50 of the Constitution of Pakistan stipulates a Parliament of Pakistan consisting
of the President and two Houses to be known respectively as the National Assembly and
the Senate. Senate is the Upper House and the National Assembly is the Lower House of
the parliament. The bill relating to the Federal Legislative List can be originated in either
House. If the House passed the bill through majority vote, it shall be transmitted to the
other House. If the other House passes it without amendment, it shall be presented to the
President for assent. See The Constitution of Pakistan, 1973 Article 50.
48 S. Fatima

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.26

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 Ordi-
nance then needs to be approved by parliament within the next 120 days to
become law.28 On 27 January 2010 the National Assembly passed the Compe-
tition 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.29
Nonetheless, the Commission was defunct for 22 days because of the lapse of
the Ordinance.30

26
See ‘Competition Commission of Pakistan in Jeopardy’ Dawn Editorial (20 November
2009) <www.dawn.com> accessed December 2010; see also E Zaidi, ‘What Will be the
Fate of Competition Ordinance 2007?’ The Nation (24 November 2009) <http://www.
nation.com.pk/pakistan-news-newspaper-daily-english-online/Business/24-Nov-2009/What-
will-be-the-fate-of-Competition-Ordinance-2007> accessed September 2011.
27
In this way the Competition Ordinance of 2009 deemed to ‘have taken effect on and
from 2 October 2007’ thereby all the decisions and acts of the commission stand vali-
dated under the Competition Ordinance 2007. See the Competition Ordinance No XLVI
of 2009 (Published in the Gazette of Pakistan, Extraordinary, 26 November 2009) (CO
2009).
28
A Subohi, ‘Will the Competition Bill be Amended?’ Dawn Editorial (11 January 2010)
<www.dawn.com> accessed 15 December 2010.
29
See ‘Re-promulgation of Competition Ordinance: CCP Asks MoF to Start Process’
Pakistan News Watch (11 March 2010) <http://news.one.com.pk/2010/03/11/re-promulgation-
of-competition-ordinance-ccp-asks-mof-to-start-process/> accessed September 2011; see
also ‘Law Ministry Issues Notification’ The News (24 April 2010) <http://www.forexpk.
com/highlights/business-news/law-ministry-issues-notification.html> accessed September
2011.
30
D Hussain, ‘Senate Body to Discuss Competition Bill’ The Dawn (22 April 2010)
<http://archives.dawn.com/archives/147862> accessed May 2011.
 Commonwealth Law Bulletin 49

E. Fifth phase: 2010 (Competition Ordinance 2010)

On 18 April 2010, the President of Pakistan once again promulgated the Compe-
tition Ordinance 2010.31 On 5 May 2010, the Senate’s Standing Committee on
Finance unanimously approved the draft of the Competition Bill 201032 with few
amendments.33
The CO 2010 lapsed on 16 August 2010. CCP as the organisation 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,34 only parliament’s approval was required to grant the CCP legal status.

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

2010)35
Finally, on 23 September 2010, the Parliament of Pakistan unanimously passed
the Competition Act 2010.36 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

31
The Competition Ordinance No XVI of 2010 (published in the Gazette of Pakistan,
Extraordinary, 20 April, 2010) [‘CO 2010’].
32
S Chaudhry, ‘Senate Body Approves Competition Bill 2010’ The Daily Times (6 May
2010) <http://www.dailytimes.com.pk/default.asp?page=2010/05/06/story_6-5-2010_pg5_
12> accessed September 2011; see further, K Ali, ‘Reply to Senate Committee’s Objections:
CCP Opposes Setting up of Separate Tribunal’ The Dawn (5 May 2010) <http://archives.
dawn.com/archives/35653> accessed September 2011; see also ‘The Senate of Pakistan
Debates’ (Official Report 16 June 2010) (62nd Session) Vol VI, No 10 p 10.
33
‘The Senate’s Standing Committee on Finance proposed that CCP three members’ com-
petition tribunal would act as a court of appeal against the decisions of CCP. The
Supreme Court of Pakistan would hear appeals against the decision of the competition tri-
bunal’. The proposal aimed to improve the relations between courts and competition
authority. Regarding the CCP’s power of dawn raids, the Committee recommended that
‘the CCP’s team would verbally inform the undertaking for search operation at the time
of visit and would also inform in writing reasons for the forcible entry into the office of
the business undertaking. It further suggested that revenue realised through imposition of
penalties by the CCP would be deposited in the Federal Consolidated Fund (FCF). How-
ever, CCP fund would remain intact and that would be financed through contributions
from federal and provincial grants’. In this manner factors that hamper the efficient work-
ing of the competition authority, like insufficient resources, constraints in hiring the ser-
vices of renowned legal experts and practitioners, can be overcome. See S Chaudhry,
‘Senate Body Approves Competition Bill 2010’ The Daily Times (6 May 2010) <http://
www.dailytimes.com.pk/default.asp?page=2010/05/06/story_6-5-2010_pg5_12> accessed
September 2011.
34
See n 31.
35
S Rahman, ‘Competition Law Comes into Force’ The Dawn (7 October 2010) <http://
archives.dawn.com/archives/41690> accessed May 2011; see also S Chaudhry, ‘National
Assembly Passes Competition Act, 2010’ The Daily Times (24 September 2010) <http://
www.dailytimes.com.pk/default.asp?page=2010/09/24/story_24-9-2010_pg5_1> accessed
May 2011.
36
The Act received the assent of the President of the Islamic Republic of Pakistan on 6
October 2010 and was published in the Gazette of Pakistan on Wednesday 13 October
2010. See n 2, CA 2010; see also <http://dartways.com/uploaded/laws/competitionn_
act_2010.pdf> accessed September 2011.
50 S. Fatima

corporate sector, while securing economic efficiency and protecting consumers

from anti-competitive attitudes and practices.37 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.38 Modern competition law seeks to ensure that the
individual’s right: ‘not to be harmed by violations of competition law’, is well
protected.39 Attempts by different legal systems to provide individuals’ with free-
dom to trade40 and to protect them from restrictions which damage this right41
became the basis of the development of the competition regime.
Competition law is designed primarily to protect competition or the competi-
tive process so as to enhance consumer welfare, guarantee consumers and pro-
ducers 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 implementa-
tion 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 gov-
ernance and development of economies for maintaining a balance in trade and
development both regionally and globally. Accordingly, it is a subject of particu-
lar relevance.
In the case of Pakistan, the government seeks to promote sustainable eco-
nomic 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.42

A. Rationale of the law

The Competition Act 2010 is a subset of broader competition policy. The objec-
tive of the act can found in the preamble: to enhance economic efficiency; to
protect consumers from anti-competitive behaviour; and to gain the advantages
of productive and dynamic efficiency.

37
See ‘Passage of “Competition Bill” a Good Initiative’ Daily Times (24 September
2010) <http://www.dailytimes.com.pk/default.asp?page=2010%5C09%5C24%5Cstory_24-
9-2010_pg5_2> accessed September 2011.
38
For details see M M Dabbah, International and Comparative Competition Law (Cam-
bridge University Press, Cambridge 2010) 1–2.
39
P Landolt, Modernized EC Competition Law in International Arbitration (Kluwer Law
International, The Hague 2006) 19.
40
See for example The Constitution of Pakistan, 1973, Ar: 18.
41
See for example The Contract Act of Pakistan, 1872, s 27.
42
See n 2, CA 2010, p 645.
 Commonwealth Law Bulletin 51

The previous law was enacted with the aim of providing measures against
the undue concentration of economic power, the growth of unreasonable monop-
oly power, and unreasonably restrictive trade practices.43 As mentioned earlier,
guaranteeing free competition in all spheres of commercial and economic activ-
ity; boosting economic efficiency; and safeguarding consumers from anti-compet-
itive behaviour are the basic objectives of the new law44 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 201045 prohibits any agreement that reduces competition
within the relevant market,46 whether it is written or oral, formal or informal.
This includes any agreement, whether or not it is unreasonably restrictive47 or
intended to be legally binding. There is a provision in the law that allows the
CCP to stipulate individual48 and block exemptions49 from prohibited agreements
on the grounds of efficiency or economic merit.50 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.51 Enterprises, in most cases, refrain from entering into written
agreements and maintain secrecy by forming cartels. Such informal or oral agree-
ments intensify the problem of proof, as there is no direct evidence available. As
a consequence such behaviours are proved on the basis of circumstantial evi-
dence. A further and vital mode of establishing the existence of an oral agree-
ment 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

43
For details refer to Part II (A) and (B) of this article; see also note 8, MRTPO 70, pre-
amble.
44
See note 2, CA 2010, preamble.
45
Ibid. s 4.
46
Ibid. s 2(k); relevant market means the market with reference to product and geographi-
cal market as determined by the Commission.
47
The erstwhile law (MRTPO 70) prohibited only ‘restrictive’ trade practices that ‘unrea-
sonably’ reduced competition but the new law has rebuffed this approach and came up
with a distinct dogma.
48
See n 2, CA 2010, s 5 read with ss 8 and 9.
49
Ibid. s 7 read with ss 8 and 9.
50
KA Mirza and FK Daudpota, ‘Pakistan Competition – The New Regime’ (2007) 11
Comp L I 7–9.
51
R Dibadj, ‘Conscious Parallelism Revisited’ (2010) 47 San Diego L Rev 591.
52 S. Fatima

providing cartel members with a strong incentive to inform on their co-conspira-

tors.52 The Competition Act 2010 authorises 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 anti-
competitive agreements.53 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 recognise 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 anti-
competitive business practices in which a dominant organisation may engage in
order to maintain or increase its position in the market.54 All developed competi-
tion jurisdictions such as the UK, Canada, France, Germany and the EU prohibit
such practices.
Such anti-competitive business practices are concerned with having a domi-
nant 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 organisation has the capacity to set prices inde-
pendently and abuse its market power. The abuse of a dominant position of mar-
ket 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 dominance55 and does
not pursue how to curtail or reduce a dominant position. Although there is pre-
sumption of dominance56 where the market share exceeds 40% of the share of
the relevant market,57 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

52
V Zoghbi, ‘Strategic Priorities of Competition and Regulatory Agencies in Developing
Countries’ draft paper, First Research Cycle of CUTS Competition, Regulation and Devel-
opment Research Forum (CDRF) (2005–2007) p 34 <http://www.circ.in/pdf/STRATEGIC
%20PRIORITIES%20OF%20COMPETITION%20AND%20REGULATORY%20AGENCIE.
pdf> accessed June 2011.
53
See n 2, CA 2010, s 39.
54
Ibid. s 2(1) (e) defines ‘dominant position of one undertaking or several undertakings in
a relevant market shall be deemed to exist if such undertaking or undertakings have the
ability to behave to an appreciable extent independently of competitors, customers, and
suppliers and the position of an undertaking shall be presumed to be dominant if its share
of the relevant market exceeds forty per cent’.
55
Ibid. s 3.
56
Ibid. s 2(e).
57
See n 45.
 Commonwealth Law Bulletin 53

also to the situation where two or more businesses acting together might exercise
control.58 Such a situation requires analysis on a case-by-case basis in order to
establish whether the acts or behaviour of an organisation or organisations
involve abuse of a dominant position of market power in terms of their purpose
and effect on the actual situation.59

D. Mergers60
UNCTAD Model Law defines a merger as a: ‘fusion between two or more enter-
prises “previously independent of one another” whereby the identity of one or
more is lost and the result is a single enterprise’.61 Merger and acquisition activi-
ties 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 origi-
nate from the jurisdiction’s doctrines vis-à-vis dominance or restraint. Some juris-
dictions 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.62
The Competition Commission of Pakistan under Competition (Merger Con-
trol) Regulations 2007 (Regulation 2007) prescribes a threshold beyond which
merger parties must get clearance from the Commission of any intended mer-
ger.63 As a result, every proposed merger does not need clearance from the Com-
mission 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 organisations 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.65 It
offers rules for pre-merger control with a rationale to ensure efficiency, lucidity
and certitude in the merger control mechanism.66 It further stipulates comprehen-

58
See n 53.
59
See n 2, CA 2010s 3 (2).
60
Ibid. s 11 of the law is designed after the OECD/World Bank Model Competition Law.
61
United Nations Conference on Trade and Development, ‘Model Law on Competition’
UNCTAD Series on Issues in Competition Law and Policy, TD/B/RBP/CONF.5/7/Rev2
(United Nations Publications, New York and Geneva 2004) 47.
62
See n 2, CA 2010 s 11.
63
Competition (Merger Control) Regulations, 2007 vide order SRO 1188(I)/2007 (Islama-
bad, 20 November 2007) reg 4.
64
Ibid.
65
Ibid.
66
Ibid. The Competition (Merger Control) Regulations 2007 prescribes the procedural
details for implementation of merger provisions given in the law.
54 S. Fatima

sive procedures for review and clearance of mergers that meet the thresholds pre-
scribed by the Commission and notified under the rules.
E. Deceptive marketing practices
The law under Section 1067 prohibits deceptive marketing practices.68 Deception
can be in the form of misrepresentation, omission, or misleading practice in pro-
motional agendas, communications, advertising, and customer service, thus con-
taminating the entire market.69 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.70 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 regard-
ing 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.71

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 . . .72
The CCP is a legal framework principally liable for the implementation of com-
petition laws, providing aid to ensure healthy competition, and developing com-
petition culture within the country.73
67
See n 2, CA 2010 s10. Section 10 prohibits certain marketing practices that includes;
distribution of false or misleading information that is capable of harming the business
interests of another undertaking; distribution of false or misleading information to con-
sumers, including lacking reasonable basis, related to price, character, method or place of
production, properties, suitability for use, or quality of goods; false or misleading com-
parison of goods in process of advertising; and fraudulent use of another’s trade mark.
68The Office of Fair Trading has been set up with the idea of building and enhancing

the bond between CCP and the consumer. It has a mandate to identify and provide
solutions to issues that stem from false or misleading advertising and cause problems
for the consumers; to create an environment that aids better functioning market for con-
sumers and ensures fair dealing in business. See <http://www.cc.gov.pk/index.php?
option=com_content&view=article&id=62&Itemid=78> accessed May 2011.
69
RK Hassan, ‘Deceptive Marketing Practices’ (speech delivered at seminar organised by
Helpline Trust in Karachi, 5 October 2010) <http://www.bluechipmag.com/bc/fea-
ture_detail.php?feature=88> accessed May 2011.
70
See n 2, CA 2010 s 37.
71
Ibid.
72
‘Independence and Accountability of Competition Authorities’ United Nations Confer-
ence on Trade and Development, Intergovernmental Group of Experts on Competition
Law and Policy, Ninth Session 15–18 July, TD/B/COM.2/CLP/67 (United Nations Publi-
cations, Geneva 2008) 3.
73
See n 2, CA 2010 s 12.
 Commonwealth Law Bulletin 55

Analysis of the structural framework of any organisation needs to satisfy spe-

cific 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 sin-
gle individual, for example in the Competition Bureau Canada where the formal
powers are actually exercised by the Commissioner of Competition.74
However, it has become generally standard to establish a commission consist-
ing of several individuals, or a corporate body with a board of directors or mem-
bers. Therefore, a different model is considered appropriate, rather than the
exercise of power by just one individual. In the UK, the Enterprise Act estab-
lished 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 mem-
bers.75 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
authorised to take decisions in relation to certain matters, particularly in relation
to mergers.76 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.77 In the European Union, the Commission is
both the institution and the college of commissioners, consisting of one commis-
sioner from each of the Member States, and they are collegiately responsible for
decisions.78
In the case of Pakistan, the law declared the Competition Commission a legal
personality79 and emphasised its administrative and functional independence.80
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.81 Questions arise on the process for recruit-
ment and selection of members. The law clarifies the aspect of composition of
the commission by defining the upper and lower limit of its members.82 At the
same time the law authorises the federal government to increase or decrease the
number of members whenever it deems appropriate.83 But there is no clear pro-

74
Competition Bureau Canada <http://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/
eng/h_00125.html> accessed September 2011.
75
See <http://www.competition-commission.org.uk/> accessed July 2011.
76
See <http://www.competition-commission.org.uk/> accessed July 2011.
77
See <http://www.competition-commission.org.uk/our_peop/index.htm> accessed July 2011.
78
See <http://ec.europa.eu/atwork/basicfacts/index_en.htm#chooses> accessed July 2011.
79
See n 2, CA 2010 s12(2); for a detailed description of the topic see JC Gray, The Nat-
ure and Sources of the Law (Columbia University Press, New York 1909) 49; see also
JW Salmond, Jurisprudence (5th edn Stevens and Haynes, London 1916) 262.
80
See n 2, CA 2010 s 12(3).
81
See n 71.
82
See n 2, CA 2010 s 14(1), that reads as ‘The commission shall not consist of less than
five and more than seven members’.
83
Ibid.
56 S. Fatima

cedure for recruiting and selecting members under the CA 2010. It is recom-
mended that a selection committee for making recommendations for selecting a
chairperson or members should be defined under the law.84 Moreover, authorities
are suggested who should invite applications from eligible candidates for engage-
ment as experts/professionals in the field of law to assist the Commission in dis-
charge 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 offi-
cers with no relevant background have been posted in the MCA.85 The leaders
in any organisation can create and sustain the sense of mission, passion and com-
mitment to fulfil the goals of that organisation, and the same is true for the com-
petition 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 organisation, as they do not comprehend the essence of the organi-
sation that is to promote the competition culture. The Act 2010 lays down eligi-
bility criteria for the appointment of members of the board,86 but the decisive
powers regarding qualification, experience and mode of appointment of the mem-
bers are again conferred on the federal government.87
The lack of a systematic approach under the MRTPO 70 hindered the analy-
sis of various sectors of the economy. As a result, there have not been many sec-
torial research work/studies, hence a systematic approach could not flourish.
However, the CCP has commenced sectorial research studies.88 The MCA’s bud-
get 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 organisation at
the level of appeal. Secure sources of income are a prerequisite for an indepen-
dent competition agency, insulated from political pressures, to perform its work
without having to resort to endowments from the government budget. The Com-
84
This helps the government fulfil its commitment to the competition law and to the sus-
tainability of the CCP. It further helps strengthen the CCP’s autonomy since the govern-
ment’s role in appointment and extension of tenure of members will be diminished. In
the past, delay in the appointment/extension of CCP members, by the concerned ministry,
adversely affected the working of the commission. See S Chaudhry, ‘Appointment, Exten-
sion of CCP Members Delayed’ The Daily Times (1 December 2011) <http://www.daily-
times.com.pk/default.asp?page=2010/12/01/story_1-12-2010_pg5_11> accessed September
2011.
85
See n 8, MRTPO 70 ss 8 and 9.
86
See n 2, CA 2010 s 12(5) gives an inclusive list of areas wherein a person’s expertise,
eminence and experience make him eligible to be appointed as a member of the Commis-
sion, i.e. ‘industry, commerce, economics, finance, law, accountancy or public administra-
tion’.
87
Ibid. s 12(5) proviso.
88
For example, Competition Assessment on Polyester Staple Fibre Industry of Pakistan,
Cooking Oil and Ghee Sector, Fertiliser Sector, Automobile Sector, Sugar Sector, Avia-
tion Sector, Power Sector in Pakistan, Banking Sector. See <http://www.cc.gov.pk/index.
php?option=com_content&view=article&id=92&Itemid=138> accessed June 2011.
 Commonwealth Law Bulletin 57

petition Act 2010 permitted the establishment of the CCP Fund as part of the
CCP, and as a source of income utilised by the authority.89 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 regula-
tory authorities in Pakistan.90 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 state-
ment that is to be audited by the Auditor General of Pakistan or its authorised
nominee.91 In the same manner, the authority is required to prepare annual
reports.92 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.93 However, the biggest challenge is to maintain the optimum
balance between autonomy and control that is the key to facilitating the output
of an organisation.

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 authorises 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’.94 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 con-
ducted 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 reason-
able grounds are required to be maintained in writing before taking action.95 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 aninvesti-
gating officer to enter premises forcibly.96 The law also provides a safeguard that
the provision is used in juridical manner by making it obligatory for the investi-
gating officer to get the written order of the Commission signed by any two
members.97 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

89
See n 2, CA 2010 s 20(1).
90
Ibid. s 20(2).
91
Ibid. s 21.
92
Ibid. s 22.
93
Ibid. s 22 (2).
94
See n 2, CA 2010 s 34(1).
95
Ibid.
96
Ibid. s 35(1).
97
Ibid. s 35(2).
58 S. Fatima

his powers or in bad faith, he will be dismissed from the service and bear other
consequences as mentioned in the law.98
As noted earlier,99 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 indi-
viduals 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 organisa-
tions involved in the cartel. Thus, competition authorities operate leniency pro-
grammes effectively worldwide for detecting cartel infringements. In the same
manner, the Competition Act 2010 also explicates the leniency provisions.100
The Commission may offer full leniency as well as partial leniency, depending
on the case.101 Moreover, the substantive law does not provide any enabling pro-
vision 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.102 The Competition Act 2010 only stipulates ‘granting of lesser pen-
alty or leniency’.
The levels of the penalties under the MRTPO 70103 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.104 Penalties under the
Competition Act 2010 are not only comparatively higher,105 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 maximum106 sanctions
such as ‘for non-compliance of any order, notice or requisition of the Commis-
sion an amount not exceeding one million rupees, as may be decided in the cir-
cumstances of the case by the Commission’; ‘for knowingly abuses, interferes
with, impedes, imperils, or obstructs the process of the Commission in any man-
ner, an amount not exceeding one million rupees as may be decided in the cir-
cumstances of the case by the Commission’. Where it is ascertained that the
organisation has been involved in infraction of the law, the Commission is
authorised 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

98
Ibid. ss 35(3) and (4).
99
Refer to pt III (B).
100
See n 2, CA 2010 s 39. It is further covered in ‘Competition Commission (Leniency)
Regulations, 2007’ vide order SRO 1190(I) 2007 (Islamabad, 20 November 2007).
101
See Competition Commission (Leniency) Regulations, 2007 vide order SRO 1190(I)
2007 (Islamabad, 20 November 2007) regs 3 and 4.
102
The EU adopted a formal settlement procedure for EU cartel cases that came into force
on 1 July 2008. The settlement procedures offer a means for all parties involved in such
procedures to resolve the matter more quickly by admitting liability rather than defending
the case, thus avoiding legal complications and reducing cost and time.
103
See n 8, MRTPO 70 s 19.
104
Ibid.
105
See n 2, CA 2010 s 38.
106
See n 2, CA 2010 ss 38(2) (b) (c).
 Commonwealth Law Bulletin 59

75,000,000 rupees or an amount not exceeding 10% of the annual turnover of

the organisation, as may be decided in the circumstances of the case by the
Commission.107 Thereby, the agency has a broader, progressive and wider
domain. The law clearly specifies the modes of recovery of the penalties.108
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 mat-
ters in which it is required to make rules or for the purpose of implementation of
the law.109

C. Competition advocacy
Competition advocacy110 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 competi-
tive industry structure, firm behaviour and market performance’. The Interna-
tional 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’.111 Advocacy
is an ongoing process, and can be used as an effective tool to apprise the desir-
ability of competition policies and advocate reforms in market disciplines. Suc-
cessful 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.

107
The rate of penalties has been revised under the Competition Act 2010. Previously it
was rupees 50 million for businesses where annual turnover could not be determined. In
the case of businesses where annual turnover can be determined, the rate of penalty is
reduced from 15% of the turnover to 10% of the annual turnover under the Competition
Act 2010. See n 2, CA 2010 s 38(2) (a).
108
Ibid. s 40, CCP is able to recover penalties through a variety of means including the
attachment of property, the appointment of a receiver, and recovery from any person who
is due to make payments to the defaulter.
109
Ibid. s 57, the Commission using this power, sought the collaboration of consultants
engaged by the World Bank and drafted the rules approved by the government and noti-
fied in the official Gazette. See <http://www.cc.gov.pk/index.php?option=com_content
&view=article&id=16&Itemid=105> accessed 3 June 2011.
110
Competition advocacy is to promote competition through providing information, edu-
cation and motivation to the general public, the business community, the government and
regulatory bodies on the need and implementation of competition law hence, building a
competition culture through assertive public relations and dissemination of information.
See J Clark, ‘Competition Advocacy: Challenges for Developing Countries’ [2005] 6
OECD J Comp L & Pol’y 4 69–80.
111
‘International Competition Network, Advocacy and Competition Policy’ report pre-
pared by the Advocacy Working Group (ICN Conference, Naples, Italy 2002) <http://
www.internationalcompetitionnetwork.org/uploads/library/doc358.pdf> accessed July
2011.
60 S. Fatima

The Competition Commission of Pakistan, realising 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.112
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.113 The CCP is specifically mandated to scrutinise
legislation that will distort competition,114 and in this regard it has submitted its
policy notes and opinion on government programmes, policies, decisions, pro-
posed regulatory reforms and projects.115

D. Promoting a culture of compliance: Voluntary Competition Compliance

Code 2010
Unconventional and progressive ways are necessary for the ingenious enforce-
ment of competition laws. Investigation procedures entail a huge budget that is
counted as a waste of financial resources. Additionally there is the risk of pun-
ishment, 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 minimised.
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
2010.116 The code is designed to promote compliance with Pakistan’s competi-
tion law and policy among businesses and their employees, and to highlight the
advantages of voluntary compliance,117 thus making markets competitive for the

112
See <http://www.cc.gov.pk/index.php?option=com_content&view=article&id=64&
Itemid=91> accessed May 2011.
113
See for example, s 49 of the Competition Act, 2002 wgucg mandates the Competition
Commission of India to embark on an advocacy campaign for promoting competition;
Chile’s Law No 20.361 of 13 July 2009 empowers the Competition Tribunal to carry out
an advocacy role on the legislative level; in the case of Ireland, art 30(1) of the Competi-
tion Act 2002, speaks about the advocacy functions of the authority.
114
See n 2, CA 2010 s 29 (b).
115
See for example, Policy Note to Government of Pakistan to Amend Bilateral Air
Services Agreement Of 1972, on Demutualization and Integration of Stock Exchanges
in Pakistan, CCP’s Opinion on Fixing of Minimum price in the Cigarette Industry
<http://www.cc.gov.pk/index.php?option=com_content&view=article&id=21&Itemid=42>
accessed September 2011.
116
See <http://www.cc.gov.pk/index.php?option=com_content&view=article&id=122&
Itemid=86> accessed June 2011.
117
For example, complying with the Voluntary Competition Compliance Code helps the
company to develop a self-correcting mechanism to detect early violation (if any) of the
CA 2010. Where the CCP detects a violation of the CA 2010, the company concerned
may be treated more leniently by the CCP and/or get a reduced penalty provided it prom-
ises compliance. In this way companies can maintain good will while at the same time
reducing litigation in courts as cases are solved amicably.
 Commonwealth Law Bulletin 61

benefit of both businesses and consumers, and initiating a healthy culture of

compliance in the country.118

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 con-
sumer 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 Competi-
tion Act 2010 sets out ‘the principles and norms of sound competitive behaviour
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 protect-
ing consumers from anti-competitive practices is to be created’.119
To improve the effective enforcement of the Competition Law 2010, this arti-
cle 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 pres-
sures. 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 familiarise 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.

118
Lahore Stock Exchange was the first corporate entity in Pakistan to adopt the VCCC.
See ‘LSE Approves Adoption of VCC Code’ Pakistan Today (Lahore 4 June 2011)
<http://www.pakistantoday.com.pk/2011/01/lse-approves-adoption-of-vcc-code/> accessed
June 2011.
119
See <http://www.cc.gov.pk/> accessed August 2011.
62 S. Fatima

(vii) Workshops need to be organised 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.

Notes on contributor
Sayyeda Fatima is a PhD Researcher at Vrije Universiteit Brussel and a Lecturer in Law
at the International Islamic University Islamabad, Pakistan.