LHC clears CCP to resume auto sector probe, rejects Honda Atlas plea

The Lahore High Court (LHC) has dismissed a petition by Honda Atlas challenging the Competition Commission of Pakistan’s (CCP) jurisdiction, clearing the way for the federal watchdog to resume its long-stalled inquiry into alleged anti-competitive practices and consumer exploitation in Pakistan’s auto industry.

In a detailed judgment authored by Justice Raheela Kamran, the court ruled that the CCP has full authority under the Competition Act, 2010, to obtain information, conduct inspections, and investigate possible violations, regardless of provincial boundaries. The court rejected Honda Atlas’s objections as “baseless” and directed the CCP to complete its inquiry within six months.

The commission had launched the probe in November 2018 after observing irregular market trends — including steep price hikes, delayed deliveries, and the widespread “own money” premium system imposed by car dealers. Honda Atlas, one of the leading automakers in Pakistan, was among several companies investigated for potential breaches of Sections 3 and 4 of the Competition Act, which prohibit abuse of dominance and anti-competitive agreements.

Between 2018 and 2022, the CCP issued multiple requests for data covering car production, pricing policies, booking terms, imports, and vendor localization. It also carried out visits to Honda’s manufacturing facilities in July 2019 and March 2021. The company, however, sought repeated extensions and later questioned the CCP’s jurisdiction, arguing that trade and industry became provincial matters under the 18th Constitutional Amendment.

In June 2023, Honda Atlas filed a petition in the LHC, securing an interim stay that paused the inquiry for over a year. After more than 15 hearings, the court ruled in favor of the CCP, reaffirming its federal jurisdiction and citing the Supreme Court’s earlier CCP vs. Dalda Foods judgment, which upheld the commission’s authority to regulate markets and compel corporate compliance.

“The Competition Commission is fully empowered to obtain data and information from companies under the law,” the judgment stated, adding that all firms are obligated to cooperate with the regulator’s lawful directions.

The decision marks a significant win for the CCP as it reasserts oversight over Pakistan’s fast-expanding auto sector — which has grown from just three manufacturers in 2018 to 13 today — amid longstanding criticism of monopolistic pricing and exploitative sales practices.