While India, which legislated its Competition Law in 2002, is yet to operationalise its merger and acquisition (M&A) provisions, Competition Commission of Pakistan (CCP) that came into existence through a law five years later, has cleared over 200 cases under M&A category. In an interview, CCP member Joseph Wilson who handles mergers, acquisitions and international affairs speaks to Joe C Mathew on the Commission’s performance during the past four years. Edited excerpts:
CCP has cleared so many merger and acquisition proposals in such a short time whereas India is yet to finalise its M&A rules. Any particular reason?
We were able to begin the scrutiny of mergers and acquisitions soon after our law got notified in 2007. This is primarily due to nature of our law, which does not require each section of the Act to be notified separately as you have done in India. Further, Indian M&A thresholds are bigger as compared to Pakistan. We have so far cleared 169 acquisitions, 40 merger cases and 6 joint venture proposals.
What is the major difference between CCI and CCP? How long does it take to clear an M&A application?
The major difference is that Pakistan’s Competition Commission has members from the private sector, while that is not the case in India. All members in CCP are legal experts in various aspects of competition. The clearance process normally is completed within 30 days. If there is no reply from the Commission within this period, it is deemed to be cleared. However, an application that needs strict scrutiny (which crosses the threshold limit) takes at least 90 days to get cleared.
Which are the problem sectors from the anti-competitive practice perspective?
Bid rigging in public procurement in sectors such as construction, machinery procurement, etc is a problem. We have found prices in such cases getting inflated at least 30 per cent.
Have you acted against public institutions?
Yes. For instance, we have taken up a case against Pakistan Airlines (national carrier) for abuse of dominance. The issue relates to the high price charged by the airline from Haj pilgrims who opt for the government-sponsored pilgrimage scheme.
The airline is charging at least twice the normal rates from them. The case is on. We also review the existing laws to see if they are impairing competition. We also make non-binding recommendations to government and come out with policy notes.
Is there a provision for appeal under Pakistan law?
Yes. We have a two-step appeal process. Normally, the decisions are taken by a single member of the Competition Commission. In case of complaints, there is a provision for appeal against this, ie a fresh hearing by a two-member panel. The verdict can also be challenged in the Supreme Court. There is also provision for an Appellate Tribunal, but it is yet to be constituted.
How many cases decided by the Commission have been appealed against?
Of the cases that were decided by the Commission, 80 per cent have been appealed, thereby posing a big challenge. We are now trying to take the parties in confidence and come out with consent orders. The idea is to rectify the problem and avoid time-consuming litigation.
How do you find sectoral regulators? Are there regulatory overlaps?
Once when we took a decision against banks, there was this turf war. Federal government later said banks might be exempted from the purview of Competition Commission. But so far, no other sector regulator has come up with a similar demand.
