Law: Competition Act, 2010

Section: 3,3(i)(2),3(f),4,37(2)

Competition Act (XIX of 2010)--- ----Ss. 3, 4 & 37(2)---Abuse of dominant position---Predatory pricing---Complainant, a Credit Rating Company, had alleged that the credit rating award to the respondent, another such company, for proposed issue of sukuk was too low or below the cost bidding in contravention of Ss.3 & 4 of the Competition Act, 2010---Both, the complainant and the respondent had participated in procuring credit rating assignment---Complainant quoted Rs.7.22 million, whereas the respondent quoted a total Rs.1,100 (an initial fee of PKR and surveillance fee of PKR 100 per annum) for the rating assignment spanning 10 years---Complainant, had alleged that the token bid by the respondent was devoid of any legitimate business justification, or lacked a commercial sense thereof and was solely made to oust its competitor from the bidding---Complainant, further alleged that the respondent had acted in contravention of the Competition Act, 2010 and that since the bid was too low, that also amounted to predation in violation of S.3 of the Competition Act, 2010---Competition Commission, on the basis of said allegations, initiated an enquiry pursuant to S.37(2) of the Competition Act, 2010 and appointed Enquiry Committee to investigate the matter for possible violations of provisions of Competition Act, 2010---Enquiry Committee observed that "the general approach with regards to predatory pricing, was that prices were assumed to be predatory if they were below average variable costs; that in such a case, there was no conceivable economic purpose other than the elimination of a competitor, since each item produced and sold, entailed a loss for the undertaking and that in line with said observation, it was concluded that by respondent's own admission, it had submitted a bid that did not reflect its cost, rather it was a token bidding"---One of the material issues that emerged from the facts and submission made by the parties, was as to what was the relevant market and whether the respondent held a dominant position in the relevant market---'Relevant product (or services) market', was determined as the provisions of "credit rating and other allied…