CCP Imposes PKR 265 Million Penalty on Cable Firms for RPM Violations

(CCP) has penalized Newage Cables (Pvt.) Ltd. and GM Cables & Pipes (Pvt.) Ltd. for violating Section 4 of the Competition Act, 2010, by engaging in Resale Price Maintenance (RPM). The CCP imposed penalties totaling PKR 265.22 million.

The Commission initiated an inquiry after receiving information supported by policy circulars from both companies. These documents restricted dealers from offering discounts beyond certain limits and prescribed punitive measures for non-compliance, including termination of dealership agreements.

Following its initial probe, the CCP authorized a detailed 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 prohibited dealers from selling products below prescribed levels, while GM Cables imposed similar restrictions through rate control notices.

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

The penalties reflect the nature, gravity, and duration of the violations. Newage demonstrated cooperation during proceedings, while GM Cables continued infringing despite initiation of the enquiry and attempts to deny documented evidence. The CCP imposed PKR 75 million on Newage and a penalty equivalent to 5% of annual turnover for FY 2023–24 ($190.22 million) on GM Cables & Pipes (Pvt.) Ltd.

The respondents have been directed to deposit penalties within sixty days, or face additional penalties of PKR 500,000 per day until compliance is achieved. The CCP also ordered both companies to cease and desist from imposing minimum resale price restrictions, withdraw all such instructions from dealers, ensure independent determination of resale prices, and submit a compliance report within prescribed timelines. Newage has been directed to remove discount cap provisions from its dealership agreements.

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