Corporate And Regulatory

Competition (Leniency) Regulations, 2007

Status: In force


S. R. O.1190(I)/2007. - In exercise of the powers conferred by section 56 of the Competition Ordinance, 2007 (the Ordinance) read with section 39 thereof, the Competition Commission of Pakistan (the Commission), is pleased to make the following regulations, namely: -

1.            Short title and commencement. - (1) These regulations may be called the Competition (Leniency) Regulations, 2007.

(2)          They shall come into force at once.

(3)          These regulations shall apply to undertakings taking part in restrictive, prohibited, deceptive and anti competitive agreements under the Ordinance.

2.            Definitions. - In these regulations, unless there is anything repugnant in the subject or context, -

(a)          "Commission" means the Competition Commission of Pakistan established under the Ordinance.

(b)          "information" includes estimates and forecasts.

(c)           "Ordinance" means the Competition Ordinance, 2007.

(d)          "prohibited activity(ies)" means activities of an undertaking which may infringe any of the provisions of the Ordinance.

3.            Grant of immunity from financial penalties. - (1) The Commission may grant an undertaking the benefit of total immunity from financial penalties if the following conditions are satisfied:

(i)            The undertaking is the first to provide the Commission with evidence of any activity leading to violations of Chapter II of the Ordinance, provided that the Commission does not already have sufficient information to establish the existence of the alleged activity.

(ii)           The undertaking: -

(a)          provides the Commission with all the information, docu-ments and evidence available to it regarding the prohib-ited activity;

(b)          maintains continuous and complete cooperation throughout the proceedings and until the conclusion of any action by the Commission arising as a result of the proceedings;

(c)           refrains from further participation in the alleged activity from the time of its disclosure to the Commission;

(d)          must not have been the one to initiate the prohibited activity; and

(e)          must not have taken any steps to coerce another undertaking to take part in any of the activities prohibited under the Ordinance.

(2)          If an undertaking does not qualify for total immunity under this regulation, it may still be entitled to the benefit from a reduction in the financial penalty of up to 100% under regulation 4.

4.            Grant of reduction in the amount of penalty. - (1) An undertaking may benefit from a reduction in the financial penalty of up to 100% if:

(a)          the undertaking seeking reduction is the first to provide the Commission with evidence of any of the activities prohibited under Chapter II of the Ordinance;

(b)          this information is given to the Commission after the Com-mission has started proceedings but before the Commission has sufficient information to issue a written notice that it pro¬poses to make a decision that the relevant provisions of Ordinance have been infringed; and

(c)           the conditions prescribed in regulation 3 are satisfied.

(2)          Any reduction in the level of the financial penalty under these cir¬cumstances is discretionary. In exercising this discretion, the Commission will take into account:

(a)          the stage at which the undertaking comes forward;

(b)          the evidence already in the Commission's possession; and

(c)           the quality of the information provided by the undertaking.

5.            Subsequent leniency applications: Reduction of up to 50 per cent in the level of financial penalties. - (1) Undertakings which provide evidence of any of the prohibited activities before the Commission issues a written notice of its intention to make a decision that relevant provisions of the Ordinance contained in Chapter II thereof have been infringed but are not the first to come forward may be granted a reduction of up to 50 per cent in the amount of the financial penalty which would otherwise be imposed, if the conditions in clause (ii) of regulation 3 are satisfied.

(2)          Any reduction in the level of the financial penalty under these cir¬cumstances is discretionary. In exercising this discretion, the Commission will take into account:

(a)          the stage at which the undertaking comes forward;

(b)          the evidence already in the Commission's possession; and

(c)           the quality of the information provided by the undertaking.

6.            Procedure for requesting immunity or a reduction in the level of penalties. - (1) An undertaking desirous of taking advantage of the lenient treatment detailed in these regulations shall contact the Commission. Anyone contacting the Commission on behalf of the undertaking must have power to represent the undertaking.

(2)          After the initial contact, Commission shall set a time limit, a max¬imum of eight weeks for the submission of the application for leniency pursuant to regulations 3 and 5 as the case may be, along with the evidence as required under Sub-regulation (4) hereof.

(3)          Applications for leniency may be made in writing. Initial contact can be made by telephone.

(4)             Initial contact with the Commission may be made with the identi¬ty not to be disclosed as part of the record. However, in the leniency appli¬cation, all the relevant information be provided and the undertaking's name must also be given to the Commission.

(5)          The undertaking may provide the Commission with all the evi¬dence relating to the suspected infringement available to it at the time of the submission. Alternatively, the undertaking may present a list of the evi¬dence that it proposes to disclose at a specified later date and provide a description of the nature and contents of this evidence. It must contain the details about the type and duration of the infringement, the product in geographical markets affected, and the identity of those involved.

(6)          If an applicant does not fulfill his obligations under these regula¬tions his status of priority shall lapse and the subsequent applicants, if any, shall move up in rank.

7.            Confidentiality. - The Commission may endeavour, to the extent that is consistent with its obligations to disclose or exchange information, to keep the identity of undertakings coming forward with evidence of any of the prohibited activities, confidential throughout the course of proceed¬ings, until the Commission issues a written notice of its intention to make a decision that relevant provisions of the Ordinance contained in Chapter II thereof prohibition have been infringed.

8.            Effect of leniency. - Immunity granted by the Commission cannot exclude claims by third parties who may have suffered loss as a result of the activities in respect of which immunity is granted. Third parties, therefore, shall have the right to pursue the private claims for damages before the Court of competent jurisdiction.

 

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