CCP Recovers Rs. 27 Million Penalty From Reliance Paints and PSM

The Competition Commission of Pakistan (CCP) has successfully recovered Rs. 27 million in penalties from Reliance Paints and Pakistan Steel Mills (PSM) by exercising its authority under Section 40(2)(a) of the Competition Act, 2010, through the attachment of their bank accounts.

These recoveries are part of the CCP’s broader strategy to enforce its mandate of ensuring a level playing field across all sectors, demonstrating its commitment to tackling anti-competitive practices.

Over the past year, the CCP has recovered a total of Rs. 69 million in penalties, accounting for 25% of the total amount recovered since the Commission’s establishment in 2007. This significant progress underscores the CCP’s ongoing vigilance and effectiveness in promoting fair competition and protecting consumer interests. To date, the CCP has recovered Rs. 269 million in penalties.

In the case of Reliance Paints, the inquiry was initiated following a formal complaint from Akzo Nobel Pakistan Ltd, alleging that the company was fixing minimum resale prices and penalizing dealers and retailers for not complying with its pricing directives. The CCP’s inquiry confirmed that Reliance Paints’ practices were restricting competition not only among its dealers but also between Reliance and its competitors, as rigid retail prices prevented discounts to consumers.

As a result, the CCP imposed a Rs. 5 million fine, which was later reduced to Rs. 2.5 million by the Competition Appellate Tribunal (CAT), although the Tribunal upheld the CCP’s findings.

In another instance, the CCP imposed a fine of Rs. 25 million on Pakistan Steel Mills (PSM) for abusing its dominant position in the low-carbon steel market. The inquiry conducted by the CCP from November 2008 to February 2009 revealed that PSM had engaged in anti-competitive practices by unfairly restricting access to specific grades of steel billets, namely SAE 1008 and SAE 1010. PSM was found to have denied supply to Frontier Foundry (FFPL) while preferentially supplying other buyers. This selective distribution distorted competition in the downstream market, where PSM holds a monopoly.

These cases highlight the CCP’s proactive stance in safeguarding competitive practices and ensuring compliance with competition law to foster a fair marketplace for all.