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Competition Commission of Pakistan dismisses complaint against Pakistan Telecommunication Company Limited

Islamabad, October 09, 2014 (PPI-OT): The Competition Commission of Pakistan (CCP) has issued an order in the matter of complaint filed by M/s Wise Communication Systems (Private) Limited (WiseCom) Vs. Pakistan Telecommunication Company Limited (PTC) for alleged Abuse of Dominance by dismissing the complaint for failure to make out a case violating Section 3 of the Competition act, 2010.

Abuse of Dominance is a conduct of an undertaking holding a dominant position in the relevant market to exclude its competitors or exploit consumers. Abusive conduct could be in the form of price discrimination, boycott, refusal to deal or excessive pricing. Such conduct is prohibited under Section 3 of the Competition Act.

WiseCom in its complaint filed before the Commission had alleged that the PTCL holds a dominant position in the fixed local loop market (FLL) and has unilaterally discontinued the services to WiseCom who is a customer and competitor of PTCL in FLL market, hence such anti-competitive conduct excludes the WiseCom from the provision of fixed local loop services in violation of the Section 3 (3)(g) of the Competition Act.

The Commission initiated a formal enquiry by appointing an Enquiry Committee to look into the veracity of the complaint. WiseCom was also given a right of hearing to establish the violation of Section 3 as alleged in the complaint and the matter was heard by the full Bench of the Commission.

The Bench in its order has held that exclusionary conduct is a commercial decision leading to anti-competitive foreclosure by the dominant firm without any objective justification that causes an actual or potential threat to the market and consumers.

The Bench highlighted the important facts which form the background of the case and include; action taken by Pakistan Telecommunication Authority (PTA) against WiseCom on 04-11-13 for engaging in alleged illegal telecom business and subsequently raid conducted by Federal Investigating agency which resulted in seizure of equipment installed at WiseCom’s office and suspension of services to WiseCom by PTCL on 26-11-13.

Payment notice dated 12-11-13 issued to WiseCom by PTCL which was alleged by WiseCom as an attempt to exclude it from FLL market was admitted by wiseCom during the course of hearing as disputed amount which matter is lingering on for the past many years and is sub juidice before the High Court.

Also, emails appended in the annexure to the complaint revealed the warnings of PTCL to pay its dues or else face action according to the books before the payment notice was issued. Further, the Bench noted that WiseCom has 7000 to 8000 subscribers in five regions which is a very miniscule market share.

A competitor having a negligible market share cannot be said to exert enough competitive pressure in the relevant market that its exclusion would impact the behaviour of the dominant undertaking and may cause prejudice to the consumers. Neither has WiseCom provided any evidence that shows any harm to consumers in terms of price, quality and choice due to the alleged action of PTCL.

Given the contractual dispute and action taken by PTA, the Bench held that PTCL’s conduct of suspension of services to WiseCom does not have the object or effect of preventing, restricting, reducing or distorting competition in the relevant market.

For more information, contact:
Asfandyar Khattak
Director (Media and Communications)
Competition Commission of Pakistan (CCP)
7th Floor South, ISE Towers,
55-B, Jinnah Avenue, Islamabad, Pakistan
Tel: +92-51-9100260-3, +92-51-9100256
Fax: +92-51-9100251
Email: akhattak@cc.gov.pk
Website: www.cc.gov.pk

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