Honda Atlas Drags CCP to Court to Block Competition Probe
Staff Report
ISLAMABAD: Honda Atlas has dragged the Competition Commission of Pakistan to block a probe against alleged anti-competitive practices by the car manufacturers.
The Lahore High Court has fixed April 15, for hearing a petition filed by Honda Atlas Cars (Pakistan) Limited (HACL), challenging the jurisdiction of the Competition Commission of Pakistan (CCP) to investigate alleged anti-competitive practices by the automobile manufacturer. Pakistan Car Sales Soar 46% in 9MFY25
According to court documents available with the reporter, the Commission had initiated an inquiry into the country’s automobile sector in November 2018, taking notice of alleged consumer exploitation, repeated price hikes, and unfair sales terms by leading players in the industry. Honda Atlas became a key subject of the probe based on suspected violations of Sections 3 and 4 of the Competition Act, 2010, which pertain to abuse of dominance and anti-competitive agreements.
Initially, HACL participated in the proceedings but gradually began resisting the inquiry process. Between 2018 and 2022, the Commission issued at least five formal requests to the company, seeking key information regarding car production, pricing policies, terms of vehicle booking, imports, vendor arrangements, localization efforts, and other operational data. The documents show that Honda submitted multiple requests for extensions but failed to provide complete information. Despite repeated opportunities, the company did not comply fully with the data requirements, even after physical visits by members of the Commission’s enquiry team to its manufacturing facility in July 2019 and March 2021.
The matter escalated in October 2022 when the Commission issued another detailed information request, seeking disclosures on investments made by Honda Japan and HACL, pricing structures, dealer circulars, localization ratios, and financial records. Rather than submitting the required data, the company raised objections regarding the legality of the ongoing enquiry and questioning the quorum and functioning of the Commission. These objections were raised formally in an extension request dated December 3, 2022.
In June 2023, Honda filed multiple petitions before the Lahore High Court, including one specifically challenging the CCP’s jurisdiction to proceed with the investigation. The company argued that trade and industry became provincial subjects following the 18th Amendment to the Constitution, and therefore the federal regulator had no authority to pursue such matters. The court granted an interim stay, halting the inquiry. Since then, more than 15 hearings have been held, but the case has yet to proceed to resolution, with further delays reportedly caused by procedural strategies adopted by Honda’s legal counsel.
The court filings further reveal that Honda has relied on legal delays to indefinitely stall the inquiry process. Despite the fact that the Commission has not issued any adverse order against the company to date, Honda continues to contest the legitimacy of the enquiry at the fact-finding stage.
Judicial precedents cited in the documents, including the Supreme Court’s judgment in CCP v. Dalda Foods, affirm that the Competition Commission has clear authority to gather information, monitor markets, and initiate enquiries without needing to show prior cause. The Court in that case held that companies are obligated to comply with regulatory directions and should not seek judicial interference before a final order is passed.
The Honda case is now being seen as a major test of regulatory enforcement and corporate accountability in Pakistan’s auto sector. At the time the inquiry was initiated, only three manufacturers operated in the market. That number has since grown to thirteen, making the issue of fair competition more pressing. The court’s ruling on April 15 is expected to clarify the scope of the Commission’s powers and could set a critical precedent for future enforcement actions in high-stakes industries.
