Rs 50m penalty for making illegal cartels](http://www.dailytimes.com.pk/default.asp?page=2007\06\05\story_5-6-2007_pg5_1)
** New Competition Policy and Law*
By Sajid Chaudhry
ISLAMABAD: The federal government on Monday has decided to announce New Competition Policy and Law in the forthcoming budget 2007-08.
This policy is aimed at imposing an all time high of Rs 50 million penalty against forming of unauthorised cartels and unjustified process of goods and services transportation in the country.
Upon non-compliance of any order, notice, or requisition of the commission an amount not exceeding Rs 1 million as penalty would be payable. Continuation of violation of any order of the commission would also attract a further penalty of up to Rs 1 million for each day after such violation.
The official sources at Monopoly Control Authority (MCA) told Daily Times on Monday that in this regard proposed Competition Act, 2007 is being tabled in the National Assembly and will be ready with other budget documents on June 9, 2007. The jurisdiction of the proposed Competition Commission, which would replace existing MCA, upon approval from parliament would also include activities of government or private undertakings.
The composition of the proposed Competition Commission of Pakistan would include five or seven members, federal government would appoint chairman of the commission, not more than two members of the commission shall be employees of the federal government. Private sector is also expected to get for the first time the member ship of the proposed Commission. The commission would have powers to authorise any officer to enter and search any premises for the purpose of enforcing any provision of this law.
In this regard, the definition of the ‘undertakings’ is being broadened to bring in to the jurisdiction of commission the activities of private as well as government bodies.
According to the new definition of ‘undertaking’, any natural or legal person, government body including regulatory authority, body corporate, partnership, association, trust or other entity in any way engaged, directly or indirectly, in the production, supply, distribution of goods or provision or control of services and shall include an association or undertakings, the official said.
The proposed law would counter the deceptive marketing practices in the country. These practices shall be deemed to be resorted or be continued in any undertaking resort to; the distribution of false or misleading information that is capable of harming the business interests of any other undertaking. The distribution of false or misleading information to consumers, including the distribution of information lacking a reasonable basis, related to the price, character, method or place of production, properties for use or quality of goods. False or misleading comparison of goods in the process of advertising, fraudulent use of another’s trade mark, firm name, or product labeling or packing.
According to the official, for a contravention of any provision of Chapter II of the Act, an amount not exceeding Rs 50 million or an amount not exceeding 15 percent of the annual turn over of the undertaking would be imposed.
The penalty would be imposed if any undertaking would limit its production, sale and unreasonable increase in prices or other unfair trading conditions. Price discrimination is set by charging different prices for the same goods or services from different customers in the absence of objective justifications that may justify different prices. Tie-ins are where the sale of goods and services is made conditional on the purchased of other goods or services.
If the penalty amount mentioned in the decision of the commission is not paid within prescribed time, attachment of immoveable or sale of moveable property, attachment of bank accounts, appointment of receiver, recovery through Land Revenue Act or deduction from receivables of the undertaking would be initiated.
positive step. along with this initiative, I hope they expand the consumer courts from Lahore to other cities as well.