CCP imposes Rs 265m aggregate penalty on two cable firms
ISLAMABAD: The Competition Commission of Pakistan (CCP) has imposed a penalty of Rs 75 million on Newage Cables (Pvt.) Ltd. and Rs. 190.22 million on GM Cables & Pipes (Pvt.) Ltd, for engaging in Resale Price Maintenance (RPM) practices in violation of Section 4 of the Competition Act, 2010.
The Commission conducted an enquiry upon receiving information, supported by documentary evidence, including policy circulars issued by the respondents, said a release issued here on Tuesday.
These circulars contained instructions restricting dealers from offering discounts beyond specified limits and prescribed punitive measures, including termination of dealership agreements, for non-compliance.
After its initial probe, the Commission authorized an enquiry under Section 37(1) of the Act. The enquiry concluded that the respondents had prima facie violated Section 4 of the Act by imposing minimum resale price restrictions on their dealers. The enquiry found that Newage’s retail discount policy and dealership agreements prohibited dealers from selling products below prescribed discount levels, while GM Cables imposed similar restrictions through its rate control notices and related communications.
On enquiry committee’s recommendations, the Commission issued show cause notices to both undertakings for their alleged conduct restricting intra-brand price competition through vertical agreements establishing minimum resale prices. After hearing the parties and conducting a detailed analysis of the evidence, the Commission concluded that both undertakings had engaged in RPM practices constituting a restriction “by object” under Section 4 of the Act.
In its order, the Commission observed that the respondents’ conduct eliminated intra-brand price competition and adversely affected consumer choice.
The practices were formalized through circulars, widely disseminated across dealer networks, and enforced through coercive measures, including threats of suspension or termination.
Taking into account the nature, gravity, and duration of the violations, the Commission observed that Newage Cables demonstrated a cooperative approach during the proceedings, whereas GM Cables continued its infringing conduct even after initiation of the enquiry and attempted to deny documented evidence. Accordingly, the Commission imposed a penalty of PKR 75 million on Newage Cables (Pvt.) Ltd. and a penalty of 5% of annual turnover for FY 2023–24, amounting to PKR 190.22 million, on GM Cables & Pipes (Pvt.) Ltd. The respondents have been directed to deposit the penalties within sixty (60) days, failing which an additional penalty of PKR 500,000 per day will accrue until compliance.
The Commission has further directed the respondents to immediately cease and desist from imposing minimum resale price restrictions, withdraw all such instructions issued to dealers, ensure that resale prices are independently determined, and submit a compliance report within the prescribed timelines. Newage has also been directed to remove discount cap provisions from its dealership agreements.
The order reinforces CCP’s commitment to ensuring fair competition in markets and protecting consumers from anti-competitive practices. Staff Report
