Lahore University of Management Sciences. LAW 394 Competition Law and Antitrust. Spring 2018

Transcription

1 Lahore University of Management Sciences LAW 394 Competition Law and Antitrust Spring 2018 Instructor Maria Farrukh Irfan Khan Room No. - Office Hours TBD mariakhan06@gmail.com, maria.irfan@lums.edu.pk Telephone - Secretary/TA TBD TA Office Hours TBD Course URL (if any) - Course Basics Credit Hours 4 Lecture(s) Nbr of Lectures per week 2 Duration 100 m Recitation/Lab (per Nbr of Lectures per week None Duration N/A week) Tutorial (per week) Nbr of Lectures per week None Duration N/A Course Distribution Core No Elective BA/LLB Open for Student Open to All 1

2 Category Close for Student Category None Course Description Systems of competition law are designed to protect the process of competition, and to deal with market imperfections arising in a free market economy. Without such checks and balances, undertakings are free to act to distort the process of competition in the free market by, amongst other things, colluding or merging with their competitors. Without a robust system of competition law natural monopolies may arise. Therefore a public restraint is essential in free market economies to ensure a fair playing field for all players in the market, whether small or large. This will be a foundation course in the workings of the Competition Commission of Pakistan. In reviewing the competition laws and judgments in place in Pakistan the course will draw heavily from the competition policy and rulings of the European Union. Simultaneously we will also undertake a survey of international anti-trust decisions, laws and judgments which will equip students to critically analyze the powers given, and the role played by the CCP and the courts to ensure free competition in Pakistan thus far. The Competition Commission of Pakistan (CCP) is an independent quasi-regulatory, quasi-judicial body whose mandate includes prohibition of abuse of a dominant position in the market, certain types of anti-competitive agreements, and deceptive marketing practices. The commission also reviews mergers, joint ventures and stock transfers. The CCP was established under the Competition Ordinance, 2007, which was repromulgated in November Prior to the Competition Ordinance, 2007, Pakistan had an anti-monopoly law, Monopolies and Restrictive Trade Practices (Control and Prevention) Ordinance (MRTPO) 1970, which had a much smaller mandate. The Competition Act, 2010 gives the CCP legal and investigative instruments and powers to ensure free competition in all spheres of commercial and economic activity, to enhance economic efficiency, and to protect consumers from anticompetitive behavior. The Act applies to all undertakings in Pakistan regardless of their public or private ownership and to all actions or matters that can affect competition in Pakistan. Although essentially an enabling law, it briefly sets out procedures relating to the review of mergers and acquisitions, enquiries, imposition of penalties, grant of leniency and other aspects of competition law enforcement. The Act prohibits situations that tend to lessen, distort, or eliminate competition such as actions constituting an abuse of market dominance, competition restricting agreements, and deceptive marketing practices. 2

3 Course Prerequisite(s) MGMT 260 Business Law OR Law 101 Introduction to Legal Reasoning. Course Objectives This will be a foundation course in the workings of the Competition Commission of Pakistan. In reviewing the competition laws and judgments in place in Pakistan the course will draw heavily from the competition policy and rulings of the European Union. Simultaneously we will also undertake a survey of international anti-trust decisions, laws and judgments which will equip students to critically analyze the powers given, and the role played by the CCP and the courts to ensure free competition in Pakistan thus far. Learning Outcomes Clear understanding of the current scope and history of Competition law in Pakistan. Ability to critically analyze local and foreign anti-trust decisions as well as understand the economic rationale behind the procedures and decisions. Develop proficient writing and comprehension skills and effectively glean relevant arguments from the material given in class. Grading Breakup and Policy Assignment (s): Home Work: Quiz (s): 25 Class Participation 15 and Attendance Midterm Examination: 25 3

4 Project: Final Examination: 35 Examination Detail Midterm Exam Final Exam Yes/No: Yes Combine/Separate: TBD Duration: TBD Preferred Date: Per LUMS schedule but will communicate if otherwise Exam Specifications: Yes/No: Yes Combine/Separate: TBD Duration: TBD Exam Specifications: Course Overview Lecture Topics Recommended Readings Objectives/Application 1. Introduction Overview of the practices controlled by competition law Pages 1-3 The Competition Act, 2010, Preamble Understand the premise of and rationale behind competition law systems. 2. The theory of competition The function of Competition Law Pages 3-25 Understand the premise of and rationale behind competition law systems. 4

5 Pages 1-19, 22-35, Market Definition and Market Power Pages Pages The Competition Act 2010 Be able to define the relevant market in order to determine if Competition laws apply. 4. Over view of EU/UK/US/Pakistani law gov. pk; Pages 49-58, Pages 19-22, Chapter 2 Discern differences & similarities between EU/UK/US and Pakistani law. Understand premise behind the law. 5

6 5, 6 Definitions What is an undertaking? Powers of the CCP The De Minimis Doctrine 7 Prohibited Agreements Exemptions: Block Exemptions Exemption Criteria Leniency The Competition Act 2010 Pages Pages The Competition Act 2010 Pages Matra Hachette v Commission [1994] ECR II 595, para 85 Competition Authority v Beef Industry Development Society Limited (BIDS) [2009] 4 CMLR 310 LDI Operators Order pursuant to the order of Honourable Supreme Court of Pakistan Section 4 of the Act Prohibited Agreement (30 April 2013) Understand which companies /agreements etc. are subject to Competition laws. Comprehend the mandate of the CCP. Understand and be able to apply Art (101)(1) Understand and be able to apply Art (101)(3) and Section 4,5 of TCA 2010 Discern which agreements require application for exemption and those that are prohibited. 6

7 Wateen Telecom (PVT.) Limited & Defence Housing Authority Order Section 4(2)(b) of the Act Territory allocation (22 Mar 2011) Dredging Companies Section 4(2)(e) of the Act Bid Rigging (23 July 2010) Fecto Belarus Tractors Ltd (Shahzad Trade Links) (JW) Section 4 of the Act Exclusive Agency Agreement (2 Oct 2009) Application for exemption of joint venture agreement between M/S Metro Cash & Carry International holding B.V.and Thal limited Section 5 of the Act Exemption Order (09 Jan 2012) M/S. Siemens (Pakistan) engineering company Ltd Order Section 39 of the Act Leniency application filed by M/S. Siemens (Pakistan) engineering company Ltd (03 April 2012) 7

8 8. Mid Term 9, 10,11 Abuse of Dominant Position Defences Abuse of Dominance: non pricing practices pricing practices The Competition Act 2010 Pages Chapters: 17, 18 Chapters 6 and 7 Understand the meaning of an undertaking having a dominant position in the market Discern the factors that lead to dominance Section 3 of TCA 2010 In the Matter of Show cause notice issued to M/S Indus Motor company limited Order (08 Nov 2013) Unfair trading conditions 8

9 M/s. Cinepax Ltd (28 March 2011) Abuse of Dominance Tie-in Pakistan International Airlines (JW) Excessive and discriminatory pricing in flight rescheduling and cancellation (8 Dec 2009) Pakistan International Airlines (JW) Unfair Trading Condition & Price discrimination (Hajj Fares Case) (20 Nov 2009) 12,13 Horizontal agreements Cartelization, collusion Pages Pages Pages Chapter 11 LPG Association of Pakistan Jamshoro Joint Venture Ltd (14 Dec 2009) Price fixing/cartel (Limited pricing) Be able to determine which agreements fall under the purview of the CCP and are prohibited. 9

10 Pakistan Banking Association and other (AG) Pricing fixing, dissimilar condition (Cartels) (10 April 2008) 14 Market studies Investigations/Inquiries Pages Understand the procedure followed by the CCP when making decisions regarding market share/presence etc. National Foods vs Shainal Enquiry Report June , 16,17,18 Mergers & Joint Ventures Pre-Merger application Pages Pages Be able to determine which mergers and joint ventures fall under the purview of the CCP, the process for obtaining approvals, limits set by the CCP. Review, first phase, Second phase Chapters: 21, 22, and 23 Chapter 12, 13. Merger Clearance-FFC Second Phase Review in Pursuance of Honourable Supreme Court Order (23 Nov 2011) 10

11 Acquisition of Business relating to a portfolio of Oncology products (excluding manufacturing) from Glaxosmithkline by Novartis A.G (09 Feb 2015) In the Matter of Second Phase review acquisition of the Global Vaccines business (excluding influenza vaccines business except in China) from Novartis A.G by Glaxosmithkline PLC (20 Feb 2015) In the Matter of Phase II Review of Amalgamation of Pakistan Mobile Communications Limited and Warid Telecom (private) Limited. (18 Mar 2016) 19, 20, 21 Deceptive Marketing Practices The Competition Act 2010 In the Matter of show cause notice issued to Pakistan State Oil company Ltd for deceptive marketing practices. (29 Nov 2016) In the Matter of complaint filed by M/s. DHL Understand the various ways in which the CCP can stop undertakings from false marketing/advertising Understand the close synergy of this provision with IP law 11

12 Pakistan (Pvt.) Ltd Order (21 Dec 2012) In the Matter of Complaint filed by M/s National Foods Limited against M/s Shainal Al- Syed Foods company for deceptive marketing practices. (June, 2016) Proctor and Gamble Pakistan (Pvt.) Limited Section 10(2)(b) of the Act Information lacking reasonable basis (Head & Shoulders Claims) (23 Feb 2010) China Mobile Pakistan Ltd (Zong) and Pakistan Telecom Mobile Ltd (Ufone) Section 10(2)(b) of the Act False & misleading information (29 Sep 2009) 22,23 IP and Competition Law Chapter. 19 Understand the overlap between IP and competition law and the remedies available to IP rights holders under competition law. 12

13 Chapter 10 M/s. Ace Group of Industries (On Complaint of BMW and Harley Davidson) Section 10(2)(d) of the Act Fraudulent use of BMW & Harley Davidson's Trade Mark 16 Aug ,25 The International dimension of Competition Law 26 Proceedings in the National Courts Chapter 12 Chapter 16 Chapter 15 Proceeding pursuant to IHC order dated in WP No. 3771/2014 Tariq Bilal v/s FOP Understand how competition law issues can be international /non-territorial Understand how decisions of the CCP can be challenged in courts Remedies available to undertakings such as injunctions and damage actions 13

14 etc (09 Oct 2015) LDI Operators Order pursuant to the order of Honourable Supreme Court of Pakistan (30 April 2013) Merger Clearance-FFC Second Phase Review in Pursuance of Honourable Supreme Court Order (23 Nov 2011) Guest Lecture/Revision Fauji Fertilizer Company, Fauji Fertilizer Bin Qasim Ltd (16 July 2010) Textbook(s)/Supplementary Readings The Competition Act, Copyright Maria Khan, All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, scanning, recording or by any information storage or retrieval system, without the prior written permission of the author. 14