Karachi: The Competition Appellate Tribunal has dismissed the appeals of 14 telecom companies, while reducing the penalty imposed on them for entering into the International Clearing House (ICH) agreement. The companies had filed appeals against the penalty imposed by the Competition Commission of Pakistan (CCP).
Justice Sajjad Ali Shah, in announcing the order, stated that the companies had contravened the Competition Act, 2010, and that the Commission had rightly exercised its jurisdiction. The initial penalty, equivalent to 7.5% of their annual turnover for the financial year 2012, has been reduced to 2% of the turnover generated specifically from the ICH agreement activity.
According to the order, the companies must deposit the reduced penalty amount within 30 days. Failure to do so will result in the original penalty being reinstated. The financial reports of PTCL, Worldcall, and Telecard were available, and their penalties were determined to be PKR 8,309 million, PKR 534 million, and PKR 189 million respectively. The remaining LDI operators were directed to submit their annual turnover.
The court documents state that the appellants filed an application with the CCP on September 6, 2011, seeking an exemption from the provisions of Section 4 of the Competition Act, 2010 for the ICH Agreement. However, they later withdrew the application on February 7, 2012, stating that the industry had not reached a consensus on the modalities of the ICH operation. Despite this, they continued to pursue the establishment of the ICH with the Ministry of Information and Technology (MoIT). The MoIT subsequently issued policy directives on August 13, 2012. The CCP issued a policy note on August 28, 2012, highlighting that the MoIT’s directives violated the provisions of the Competition Act, 2010.
During the hearing, the companies’ counsels argued that the ICH agreement was entered into under the compulsion of state directives from the MoIT and PTA to curb grey traffic and protect national security. However, the counsel for the CCP contended that the companies had voluntarily entered into the agreement. The Tribunal rejected the state compulsion argument, noting that the ICH agreement was not a result of any policy of the MoIT and that the LDI operators had, in fact, prevailed upon the Ministry to get their stance approved.
