Court Affirms CCP's Decision to Prohibit Price Fixing in Domestic Appliances Industry
The Competition Commission of Pakistan (CCP) has taken action against leading electronic home appliance manufacturers for engaging in resale price maintenance (RPM), a practice considered a form of price fixing and prohibited under the Competition Act, 2010.
## Findings and Legal Basis
The CCP found that the appliance manufacturers imposed restrictive pricing policies on their dealers, including prohibiting sales below certain price points, disallowing discounts, and banning package offers. Such actions are defined as resale price maintenance (RPM), which is anti-competitive and harms consumer welfare. RPM is explicitly prohibited under the Competition Act, 2010, and the CCP is empowered to take action against such practices to ensure fair competition in the market.
## Enforcement and Penalty
Initially, the CCP imposed a monetary penalty on the companies after confirming the contravention. The companies did not contest the CCP’s findings but sought relief on the penalty amount before the Competition Appellate Tribunal, citing corrective measures taken. The Tribunal upheld the CCP’s findings but reduced the monetary penalty to Rs 90 million. The companies were directed to deposit this revised amount within 30 days. The Tribunal considered that the companies had refunded dealers the amounts previously collected under the RPM policy and provided undertakings for future compliance with competition laws as mitigating factors in reducing the penalty.
## Company Compliance and CCP Warnings
The companies refunded the affected dealers and committed to future compliance with competition laws. The CCP reiterated its stance against all forms of price fixing, including setting minimum or maximum resale prices and restricting discounts or package offers. The Commission warned that such conduct is a serious violation of competition law and undermines market dynamics.
The case underscores the CCP’s commitment to enforcing competition laws against restrictive and anti-competitive business practices in the electronic home appliances sector. The Competition Appellate Tribunal has upheld an order against leading electronic home appliances brands for engaging in resale price maintenance, marking a significant step towards ensuring fair competition and protecting consumer welfare in Pakistan.
The Competition Commission of Pakistan (CCP) has directed the affected companies to deposit a revised monetary penalty of Rs 90 million within 30 days, as the Competition Appellate Tribunal upheld the CCP's findings against them for indulging in resale price maintenance (RPM) in the finance sector of the business industry. The CCP reiterated its strong stance against any forms of price fixing, such as setting minimum or maximum resale prices, and vigilantly monitors businesses to prevent such violations of competition law.
