The Lahore High Court (LHC) has scheduled a hearing on April 15, 2025, for a petition filed by Honda Atlas Cars (Pakistan) Limited, which is contesting the jurisdiction of the Competition Commission of Pakistan (CCP) in an ongoing investigation into alleged anti-competitive practices in the automobile sector. According to The Express Tribune, the CCP initiated this inquiry in November 2018 after raising concerns about consumer exploitation, frequent price hikes, and unfair sales practices by major players in the auto industry.
The investigation specifically examines potential violations of Sections 3 and 4 of the Competition Act 2010, which address abuse of dominance and anti-competitive agreements. Over the course of the inquiry, which has spanned several years, the CCP issued multiple requests for information from Honda Atlas, covering critical areas such as car production, pricing policies, vehicle booking terms, imports, vendor arrangements, and localization efforts.
Between 2018 and 2022, Honda Atlas received at least five formal requests from the commission. However, the company sought extensions several times to meet these requests, indicating challenges in complying with the regulatory demands. Additionally, the CCP inquiry team conducted visits to Honda’s manufacturing facility in July 2019 and March 2021 to gather further data.
In October 2022, the commission escalated its inquiry by issuing a detailed request that sought information on investments made by Honda Japan and Honda Atlas, as well as financial records, dealer circulars, and pricing structures. This heightened scrutiny reflects the commission's commitment to ensuring fair competition within the sector.
In response to the ongoing inquiry, Honda Atlas raised legal objections in December 2022, arguing that, following the 18th Amendment to the Constitution, trade and industry matters are now provincial responsibilities. Consequently, the automaker contended that the federal regulator lacked authority over the issue. In June 2023, Honda filed multiple petitions in the LHC, including a challenge to the CCP’s jurisdiction.
The court granted an interim stay on the inquiry, effectively halting the investigation while legal proceedings continued. Since then, the matter has been under review in over 15 hearings. The LHC's ruling will be pivotal in determining the extent of the CCP's powers and may set an important precedent for future regulatory actions in high-stakes industries.
Legal precedents, such as the Supreme Court’s decision in the CCP vs Dalda Foods case, support the CCP’s authority to oversee market activities and conduct inquiries. That ruling emphasized the obligation of companies to comply with regulatory directives, indicating that judicial intervention should not be sought before a final decision is made.
When the inquiry was initiated, only three auto manufacturers operated in the market, but the number has since increased to 13. This growth highlights the increasing importance of fair competition in the sector and the need for regulatory oversight to protect consumers.
The upcoming LHC hearing is expected to clarify the legal landscape concerning the CCP's jurisdiction, and its outcome could have far-reaching implications for both Honda Atlas and the broader automobile industry in Pakistan. Stakeholders and industry experts are closely monitoring the situation, as the ruling may influence future regulatory frameworks and compliance protocols within the growing market.
In summary, the legal battle between Honda Atlas and the Competition Commission of Pakistan underscores the complexities of regulatory oversight in a rapidly evolving industry. As the court prepares to hear the case, the implications of its decision will resonate throughout the sector, shaping the future of competition law and consumer protection in Pakistan's automotive market.
