Cartels & the Politics of Competition Enforcement in Pakistan

When Pakistan promulgated the Competition Ordinance in October 2007, it became the second South Asian country to adopt a competition law that was in alignment with international competition principles and best practices.2 In promulgating the Ordinance, the government of Pakistan hoped to usher in an era of increased economic efficiency, consumer welfare and international investment for the country.3 It was a testament to the government’s commitment to giving effect to the Ordinance, that by November 2007 it had also established and operationalized the Competition Commission of Pakistan (“CCP”) as the first tier, primary competition law enforcement authority in the country.

Despite the excitement surrounding it, the adoption of the Competition Ordinance was, in fact, Pakistan’s second attempt at regulating concentration of wealth in the country. Pakistan had first attempted this task in 1970 when it adopted the Monopolies and Restrictive Trade Practices (Control and Prevention) Ordinance and established the Monopoly Control Authority (“MCA”) to enforce it. However, this first attempt failed, largely due to the MCA’s limited powers of enforcement and lack of political autonomy. Given the more elaborate scope of the Competition Ordinance; the fact that it envisaged the CCP as an autonomous statutory body and conferred upon it quite substantial powers of enforcement, it was hoped, and indeed believed, that Pakistan’s second attempt in this regard would prove to be a far greater success than its first.

In this article I argue that despite the promise of independence and the arsenal of scope and powers, the CCP has, in fact, only fared marginally better than the MCA in achieving its avowed aims. I explore this argument by focusing on the CCP’s decisions in respect of prohibited agreements under Section 4 of the Pakistan Competition Act 2010. To place the discussion in context, I begin by tracing a brief history of competition law in Pakistan, and by outlining the CCP’s structure, composition and powers, particularly with regard to prohibited agreements. I then examine the CCP’s key decisions in respect of prohibited agreements and the extent to which the CCP has succeeded in enforcing these. I end by outlining factors both intrinsic and extrinsic to the CCP, that have most influenced its operations, for better, or, as is the case, for worse.