On 11 March 2022, the Competition Commission of Pakistan (CCP) passed an order holding that RPM arrangements, including those that limit discounts, fix the price, and/or set a minimum or maximum price floor or ceiling, fall under the purview of Section 4(2)(a) of the Competition Act, 2010 (the Act), constitute a fixation of the selling price of a good or service, and should be regarded as anti-competitive because they harm both intra-brand and inter-brand competition.
Del Electronics and Haier Pakistan were both found to have violated Section 4 of the Act by imposing pricing and other restrictions through RPM (resale price maintenance) agreements, and any agreements or arrangements that these firms had in place were deemed null and void, said a press release issued here.
The matter concerned a CCP’s inquiry into the price control circulars released by Del Electronics (Private) Limited and Haier Pakistan (Private) Limited.
Four Haier Pakistan circulars dealt with the implementation of a fixed price list for products and the levying of fines against select dealers for disregarding the fixed price lists. Regarding Del Electronics, two circulars that were similar to one another were discovered, in which dealers were fined for selling appliances for less than the amounts set by Del Electronics.
Del Electronics stated that it will abide by the CCP’s ruling and reimburse its dealers for any fines or punishments imposed and that the anti-competitive practice had been stopped following a management change at the company. Due to Del Electronics’ compliance-focused approach, a penalty of Rs. 100 million only was imposed. The reduced fine was made contingent upon Del Electronics honouring its promise to reimburse its dealers for the penalties and fines within the CCP’s mandated time frame in terms of its order.
Del Electronics later challenged the CCP’s order in the Competition Appellate Tribunal under Section 42 of the Act, and it was admitted for a regular hearing.
The Tribunal directed Del Electronics to pay refunds of the penalty amounts/sanctions to its dealers under the CCP’s order after hearing the parties.—APP
