Last week in this space I wrote that the lending of permanence to the Competition Commission of Pakistan (CCP) through the Competition Act, 2010 (the Act) is a welcome development. I argued that intra-provincial trade cannot be covered by CCP and the provinces need to wake up to this fact. And even though pressing social issues such as the Brad-Angelina story deserve my attention this week, I somehow feel compelled to say more about competition law.
All that sounds good in theory does not always translate into reality. The law, as it has been passed recently, was debated for a considerable time on and off the floor of the national legislature. The provisions most debated related to the penalties that can be imposed by the CCP, its power of search and seizure, mechanism for appealing its decisions etc. The media has treated the CCP as its darling organization and anyone talking of an amendment was painted as helping the vested interests. There is no doubt that the cause represented by the CCP is a popular one. However, something of the truth is always lost in a situation where blind love emerges- especially of the sort that the media has displayed for the CCP.
The penalties that the CCP can impose are indeed significant; fines go as high as Rs. 75 million or 10 percent of the annual turnover. In such a situation, due process must be guaranteed. But right from the time an investigation against you begins till the final verdict (before appeal) is passed, the judge, jury and executioner will be the CCP. Something about that does not sound right. Till changes brought about by the Act, the CCP even heard the appeals itself. When the Parliament raised legitimate questions about the fairness of the process, the media castigated parliamentarians and refused to scrutinize the law. The argument that certain other regulatory bodies in Pakistan might have a similar structure for appeals is not good enough. Laws, being reflective of societies, are supposed to evolve in a progressive rather than regressive manner. The Parliament, especially the Senate, deserves praise as it made sure the appellate structure was amended; affected parties can now appeal before a Competition Appellate Tribunal with members having judicial and technical expertise.
I do not mean to question the integrity or competence of the officials at the CCP. At the same time, lets not forget that the interpretation of actions of institutions is often controlled by effect and not intention. The perception of fairness is just as important as fairness in judicial matters and the CCP will be better served by a more transparent system.
Another power under the Act that can be exercised by the CCP is that of search and seizure. Basically, if the CCP believes that you are carrying out an anti-competitive practice; its officers can arrive at your door-step and ask to search your property. If you refuse the search (as some of you might believe in the right to your privacy and property) the CCP officers can make a forcible entry provided two of its Members are satisfied that your refusal was without reasonable cause. Advocates of this power see dawn raids as essential if cartels are to be busted but here is the issue: what are the effects on the transparency of the system if CCP officers are required to obtain permission from, well, CCP Members?
Fairness has been a casualty in the process. The law should have provided for approval from an independent judicial authority before conducting dawn raids; in Singapore the permission is sought from a Magistrate and in the UK a High Court judge has to authorize forcible entry. In the USA, this healthy distinction between the investigating and the judicial authority is most marked. It is mind-boggling that the media has never seriously raised an issue with this power or its possible abuse. Whether the CCP abuses this power today or tomorrow is irrelevant, the point is that it appears to lack due process. What I am most interested in is the reaction of the print and electronic media the day our competition authority moves against anti-competitive practices in this sector. A dawn raid would definitely bring the reality home to the media houses that have carried out a woefully inadequate critique of the new competition law.
I have never disputed the need for a robust competition law regime. Anti-trust is essential but so is due process. The CCP is a necessary body but transparency cannot be a casualty. Its predecessor, the Monopoly Control Authority, was depressingly ineffective. However, being haunted by the ghosts of a predecessors reputation cannot mean that a law without adequate checks persists. The Competition Act, 2010 has been passed amid fan-fare; over time the effects of the CCPs powers will be debated. Eventually, checks will be brought in but till then the CCP will be regularly stalled by the courts. Why? Because not enough thinking went into making the law.
The writer is a Barrister of Lincolns Inn and practices in Lahore. He has a special interest in Anti-trust/Competition law. He can be reached at [email protected]
