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ISLAMABAD: The Competition Commission of Pakistan (CCP) has issued notices to 20 brands for alleged deceptive marketing, and the scope of action against unrealistic but lucrative sale offers will also be expanded to other brands.
The commission has acted against retailers advertising discounts as “up to a percentage” during the “end of season sales” and issued notices to 20 brands, seeking clarification on their potentially misleading discount practices. The CCP has said that such unspecified discount offers are akin to ‘bait and switch advertising’ and the commission has defined it as a tactic to mislead buyers.
Under these conditions, a seller advertises an appealing but spurious offer to sell a product or service that the seller does not intend to sell.
The initial CCP inquiry indicated that the seller offers an unwanted alternative, which is prohibited under Section 10 of the Competition Act 2010 as deceptive marketing practices. Market Intelligence Unit of Fair Trade of the CCP conducted a random survey in the twin cities and identified various brands offering discounts “up to some percentage” on their products..
The survey revealed that a maximum (upper limit) discount was offered on a small collection of least attractive articles, and the most popular and frequently purchased items were available with minimal or no discount.
Consequently, a clear gap was observed between the advertised discounts and the actual offers, compelling the customers to ask multiple questions to determine discounts on their chosen items.
However, some of the brands were offering flat discounts or concessions (discounts up to some upper limit) with adequate disclosures and disclaimers identifying the discounts if they were on the entire or specified stock. The CCP appreciated the clear approach.
The commission advises various consumer brands offering discounts to preclude distributing any misleading information and ensure clear and adequate disclosures regarding actual and discounted prices with the stock details on offer with flat or differential discounts.
Undertakings, brands and outlets violating this directive may face enforcement action by the CCP under Section 10 of the Competition Act, 2010.
Published in Dawn, September 22nd, 2024
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