DefinePK

Abstract

By imposing financial penalties, the Competition Commission of Pakistan (CCP) aims to deter undertakings from engaging in anti-competitive practices. The number of financial penalties indicates the seriousness of the infringement. In Pakistan's competition regime, an 'Undertaking-focused Penalties' model exists. The emphasis is only on infringements committed by 'undertakings' and not by 'individuals', except where an individual acts as an undertaking. The investigations can only lead to administrative and civil law sanctions. However, individuals can be imprisoned for not complying with an Order of the CCP. The debate to induct criminal enforcement mechanisms in other civil and administrative jurisdictions has started already. As a successful outcome of the debate, a policy shift can be expected. In that case, the individuals may expect to encounter prosecution as a matter of rule rather than an exception. However, several challenges need to be addressed, before employing criminal punishment as a tool to achieve the underlying enforcement objectives of the Competition Act 2010 in practice. This paper analyses whether strong sanctions help to deter cartels and whether it is appropriate to incorporate criminal penalties. It reviews the existing model of penalties adopted by Pakistan's competition regime and discusses the possibility of adopting a different model in the future. It also focuses on the challenges of criminalizing cartel penalties. Many competition jurisdictions have already introduced criminal penalties. It will certainly not take long before this debate of whether to introduce criminal penalties for cartels will commence in Pakistan’s competition regime as well.