Academia Drive

In November 2016 the Competition Commission launched its Competition Advocacy Academia Drive campaign, which aims to promote awareness of competition law among university students and faculty members. The campaign introduced a 16-week module on economics and competition law, which was developed by the commission in collaboration with King's College London. The commission hopes that various universities will adopt these modules as part of their curriculum.

In this regard, the campaign envisages a series of seminars and interactive sessions with faculty members and students of economics, management sciences and law at 33 leading universities across Pakistan. The campaign aims to establish links between academic institutions and the commission, resulting in research development and student internship and training programmes at the commission.

Show cause notice for collusive activities

Following an enquiry into the Pharma Bureau (part of the Overseas Investors' Chamber of Commerce and Industry), the Competition Commission recently issued a show cause notice against the bureau for allegedly engaging in collusive activities in violation of Section 4 of the Competition Act 2010. Section 4 prohibits undertakings or associations from deciding on matters such as pricing, production, supply and the distribution of goods or services which aim to or have the effect of preventing, restricting, reducing or distorting competition within the relevant market.

The enquiry report that the commission issued before the show cause notice concluded that the Pharma Bureau appeared to have been involved in:

  • the sharing of strategic and commercially sensitive information; and
  • providing updates and overviews regarding prices, costs, profits, demand and the industry as a whole.

This information was used by member companies to increase the prices of various pharmaceutical products.

Show cause notice for deceptive marketing practices

The Competition Commission conducted an enquiry into Shainal Al-Syed Food Company, following a complaint from National Foods Limited alleging that Shainal had used deceptive marketing practices (which are prohibited under Section 10 of the Competition Act) by adopting and using packaging for its spice mixes that imitated National Foods' spice mix packaging.

The enquiry report considered the concept of parasitic copying and copycat packaging and concluded that Shainal had conducted 'parasitic copying', relying on Jorge Novais Goncalves's definition:

"Parasitic copying typically consists in reproducing the main presentational features of market leading products (such as the shape of the product or of its packaging, color combination and graphic arrangement) but usually there is just enough difference to avoid a clear cut trade mark infringement. Still they often generate deception or confusion among consumers."

The commission found that Shainal Foods had resorted to the fraudulent use of National Foods' logo, packaging, colour scheme, design and appearance, which has the potential to inflict harm on National Foods' goodwill and business interests and cause confusion among customers through the dissemination of false and misleading information. As a result, the commission has recently initiated proceedings against Shainal Foods.

Policy note

The Competition Commission recently issued a policy note to the government recommending a review of a provision of the Telecom Policy 2015, a policy formulated and issued by the Ministry of Information Technology and Telecom. The commission noted that clause 5(1) of the Telecom Policy provides that competition rules for the regulation of ex-post competition issues in the telecoms sector shall be made exclusively by the Pakistan Telecommunication Authority. The rules shall, among other things, provide a process for remedying anti-competitive behaviour (both ex-ante and ex-post) in the telecoms industry.

According to the commission, in the context of regulating anti-competitive practice and mergers in the telecoms sector, the Telecom Policy and the rules framed thereunder would create jurisdictional overlap and conflict between the commission and the Telecommunication Authority. Therefore, in the event of any conflict or jurisdictional overlap in this regard, the Competition Act, being an act of parliament, shall take precedence over Telecom Policy rules.

In its policy note, the commission recommended a review of the Telecom Policy in the interests of the administration of justice and emphasised the need for collaboration between the commission and the Telecom Authority to avoid any actual or potential conflicts in future.

For further information on this topic please contact Sanaya Vachha at Vellani & Vellani by telephone (+92 21 3580 1000) or email (sanaya.vachha@vellani.com).

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