Law: Competition Act, 2010

Section: 4

Competition Act (XIX of 2010)---Ss. 4, 5, 9 & 11---Competition Commission (General Enforcement) Regulations, 2007, Regln. 4---Application for exemption of "Joint Venture Agreement" from the application of S.4 of Competition Act, 2010---Scope---Earlier, the undertakings had also filed a pre-merger application under S.11 of Competition Act, 2010 seeking No Objection Certificate for the Joint Venture so created---Undertakings had agreed to restructure their respective subsidiaries in Pakistan---Parties agreed to impose restriction upon themselves and their affiliates not to directly or indirectly own, manage, operate, join, control, or participate in the ownership, management, operation or control of any company, firm or person, carrying on competitive business in or from Pakistan; or provide technical or other information to any third party, concerning the setting up of any competitive business---For application of competitive business, the Commission defined the relevant market as that of hyper-market, retail food stores and super market selling food and non-food items, with a shop floor area in excess of 1,500 square-meter, within the territory limits of Pakistan---Counsel for the parties submitted that the retail segment would always be a competitive, even though their main focus, was on the wholesale segment---For an agreement to qualify for exemption under S.5 of Competition Act, 2010, it must meet the criteria as laid down in S.9 of said Act---Application of the undertakings had mentioned that the proposed joint venture would facilitate the growth of the wholesale business as the entities would be able to combine their resources and take advantage of the resulting economics of sale, thereby becoming more competitive and benefiting the consumers---Submission had merit to the effect that the parties would bring in not only their expertise in the wholesale business, but would also confine their assets in order to form the Joint Venture, which ultimately could result in reduced prices on account of economics of sale, providing increasing opportunities for local suppliers etc.---Restrictions imposed by undertakings upon each other, would ensure efficiency;…

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