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The Competition Commission of Pakistan (CCP) has taken a major regulatory step against the country’s leading private education providers. Today, the Commission issued show-cause notices to 17 major private school systems. The regulators accuse these institutions of abusing their dominant market position. Specifically, the schools are forcing parents to purchase overpriced, logo-branded uniforms and stationery exclusively from authorised vendors.
This enforcement action follows a detailed suo motu inquiry triggered by numerous complaints. Parents alleged that schools created “artificial barriers”, leaving them no choice but to pay inflated prices for mandatory supplies.
The “Captive Consumer” Trap
The CCP’s inquiry revealed a disturbing economic reality for families. Once a student secures admission, the school effectively holds a 100% market share over that student’s educational needs. Consequently, parents become “locked-in” or “captive consumers”.
Schools exploit this position through tying arrangements. They make continued enrollment conditional upon the purchase of secondary products like uniforms and notebooks. The inquiry found that:
- Schools secretly partner with specific vendors or sell “study packs” directly via online portals.
- Students are strictly prohibited from using generic notebooks or uniforms from the open market.
- Logo-branded items are sold at up to 280% higher prices compared to similar quality items in the open market.
Because switching schools involves high admission fees and travel constraints, parents cannot easily leave. Therefore, they are forced to accept these unfair trading conditions without resistance.
This monopoly behaviour goes beyond hurting household budgets. The CCP observed that these practices are destroying the open market. By appointing exclusive vendors, these school systems effectively foreclose the market for thousands of small stationers, uniform sellers, and retailers across Pakistan.
Currently, private institutions educate nearly 50% of the country’s students. With high inflation already straining wallets, this “forced commercialisation” places an immense financial burden on millions of families.
Schools Named & Potential Penalties by CCP
The school systems named in the show-cause notices operate hundreds of campuses nationwide. The list includes:
- Beaconhouse School System
- The City School
- Lahore Grammar School (LGS)
- Roots International & Roots Millennium
- Headstart
- Froebel’s
- Westminster International
- KIPS
- Allied Schools
- Super Nova
- Dar-e-Arqam
- The Smart School
- STEP School
- United Charter School
- CAPS
The CCP has directed these schools to submit written responses within 14 days. If the schools fail to justify their practices, they face severe consequences. Under the Competition Act, 2010, the Commission can impose a penalty of up to 10% of the school’s annual turnover or PKR 750 million (75 Crore), whichever is higher.
