Competition Advocacy as a Tool for Promoting Competition Culture and Combating Public Restraint: The Case of Pakistan

This article is part of a Chronicle. See more from this Chronicle

Joseph Wilson, Aug 12, 2014

Pakistan is one of the few countries that have had competition legislation since before 1970; in Pakistan the legislation was in the form of the Monopolies and Restrictive Trade Practices (Control and Prevention) Ordinance of 1970. However, in October 2007, Pakistan promulgated Competition Ordinance, 2007, which repealed the MRTPO; disbanded the Monopoly Control Authority, which had enforced the MRTPO; and provided for the establishment of the Competition Commission of Pakistan.

The MRTPO had been drafted with the objective to prevent undue concentration of economic power in the hands of few, and had substantive provisions that proscribed (i) undue concentration of economic power, (ii) growth of unreasonable monopoly power, and (iii) unreasonably restrictive trade practices. The Competition Ordinance, on the other hand, was promulgated with the following objectives: (i) to provide for free competition in all spheres of commercial and economic activity, (ii) to enhance economic efficiency, and (iii) to protect consumers from anticompetitive behavior. The foregoing triad captures the various facets of the notion “consumer welfare,” which is globally recognized as the raison d’être for having a competition regime. The Competition Ordinance was, however, a temporary legislation, which run its course in November 2009 but was extended as a temporary competition regime though Competition Ordinance, 2009, and then Competition 2010, thereby lending continuity to the regime since 2007.

In October 2010, Pakistan finally got permanent legislation in the form of the Competition Act, 2010, having the same substantive provisions-and some additional provisions relating to the establishment of the Competition Appellate Tribunal-as introduced by the Competition Ordinance 2007. The Act applies to all undertakings (firms), whether governmental or private, and to all actions or matters which have the effect of distorting competition within Pakistan. The substantive provisions of the Act include prohibitions against (i) abuse of a dominant position; (ii) entering into agreements which have the object or effect of preventing, restricting, or reducing competition within the relevant market; and (iii) deceptive marketing practices. It also introduced a sophisticated pre-merger clearance regime.