CCP Decision Upheld to Impose Rs. 15 Million Fine on DHA Lahore and ISP

In a significant ruling, the Competition Appellate Tribunal has dismissed the appeals filed by Defence Housing Authority (DHA), Lahore, and ISP, upholding the Competition Commission of Pakistan’s (CCP) decision to impose substantial penalties of Rs. 15 million for engaging in prohibited agreements that restricted consumer choice. The Competition Appellate Tribunal has maintained the penalties levied by the CCP on DHA Lahore and Internet Service Provider Telecom. DHA Lahore was fined Rs. 10 million and ISP Rs. 5 million for entering into an exclusive arrangement of limiting the provision of telecommunication and media services within DHA Lahore to ISP alone. The proceedings were initiated following numerous complaints from DHA Lahore residents about the lack of choice in service providers other than Specific ISP and the unsatisfactory quality of services offered. Investigations by the CCP revealed an exclusive arrangement between DHA Lahore and Certain ISP, granting the latter sole rights to provide telecommunication and media services in certain phases of DHA. The exclusive agreement between DHA Lahore and ISP was found to be in contravention of Section 4 of the Competition Act, 2010. Consequently, the CCP, vide its order dated 22 March 2011, imposed penalties of RS. 10 million on DHA and Rs. 5 million on Internet Service Provider. The provisions of the agreement granting this ISP exclusive rights, including the right of way and soil digging permissions, were declared void and without legal effect. Both DHA Lahore and ISP appealed the CCP’s decision before the Competition Appellate Tribunal, Islamabad. After extensive hearings, the Tribunal dismissed both appeals, affirming the CCP’s findings and penalties.