CCP Hits Two Cable Firms with PKR 265 Million Penalty Over RPM Violations

(CCP) has imposed penalties on Newage Cables (Pvt.) Ltd. and GM Cables & Pipes (Pvt.) Ltd., for engaging in Resale Price Maintenance (RPM) practices violating Section 4 of the Competition Act, 2010.

The CCP conducted an enquiry after receiving documentary evidence, including policy circulars from respondents, that restricted dealers from offering discounts beyond specified limits and prescribed punitive measures for non-compliance.

After its initial probe, the Commission authorized an enquiry under Section 37(1) of the Act. The enquiry concluded that both respondents had violated Section 4 by imposing minimum resale price restrictions on their dealers. Newage’s retail discount policy and dealership agreements prohibited dealers from selling products below prescribed discount levels, while GM Cables imposed similar restrictions through rate control notices.

The Commission issued show cause notices to both undertakings for alleged conduct restricting intra-brand price competition through vertical agreements establishing minimum resale prices. After hearing the parties and analyzing evidence, the Commission concluded that both had engaged in RPM practices constituting a restriction “by object” under Section 4 of the Act.

In its order, the CCP observed that respondents’ conduct eliminated intra-brand price competition and adversely affected consumer choice. The practices were formalized through circulars widely disseminated across dealer networks and enforced through coercive measures, including threats of suspension or termination.

Newage demonstrated a cooperative approach during proceedings, while GM Cables continued infringing even after initiation of the enquiry and attempted to deny documented evidence. Accordingly, the CCP imposed a penalty of PKR 75 million on Newage Cables (Pvt.) Ltd. and a penalty of 5% of annual turnover for FY 2023–24, amounting to PKR 190.22 million, on GM Cables & Pipes (Pvt.) Ltd.

Respondents have been directed to deposit penalties within sixty days; otherwise, an additional penalty of PKR 500,000 per day will accrue until compliance. The Commission has also directed the respondents to cease and desist from imposing minimum resale price restrictions, withdraw all such instructions issued to dealers, ensure that resale prices are independently determined, and submit a compliance report within prescribed timelines. Newage has been directed to remove discount cap provisions from its dealership agreements.

The order underscores CCP’s commitment to ensuring fair competition in markets and protecting consumers from anti-competitive practices.