ISLAMABAD - The Competition Commission of Pakistan (CCP) has disposed of a complaint filed by a Bi-axially Oriented Polypropylene (“BOPP”) films manufacturer regarding the grant of Pioneer Industry Status (PIS) by the Ministry of Industries and Production to manufacturers of Bi-axially Oriented Polyethylene Terephthalate (“BOPET”) films.

In the complaint, it was claimed that BOPET films manufacturers do not qualify under the criteria laid down for the PIS, and they falsely claimed the pioneer status which has distorted competition in the relevant market.

It was alleged that the economic benefits of PIS granted to BOPET manufacturers has enabled them to abuse their dominant position in violation of Section 3 (1),(2) & (3)(f) of the Competition Act 2010 (“the Act”), i.e., by charging predatory pricing and driving competition out of a market, preventing new entry and monopolizing the market.  The Commission conducted a public hearing on the 4th of September 2014, wherein the complainant and respondents and representatives of Engineering Development Board submitted their views and comments on the matter.

The assessment of abuse of dominance is dependent on the determination of relevant market which primarily comprises of substitutable products in a particular geographic area. The products involved in this case were BOPP and BOPET film sheets produced in Pakistan. Considering the characteristics, unique properties and suitability for their end usage, BOPP and BOPET film sheets are best used as complements of each other and are not substitutes. The Commission noted that since BOPP and BOPET do not form part of the same relevant market, therefore, the grant of PIS to BOPET manufacturers has not restricted, reduced or distorted competition in the market of BOPP.

The bench hearing the case comprised of Dr Joseph Wilson, Chairman, Dr Shahzad Ansar and Mueen Batlay, members.