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13 June 2019
The Competition Commission recently initiated proceedings against 18 electric cable manufacturers for engaging in deceptive marketing practices under the Competition Act 2010 by failing to disclose to consumers that there were cash/cash coupons in the packaging of electric wire cable bundles.
The commission's enquiry concluded that on account of this omission, purchasers of the product were unaware of the coupons and this benefit was instead transferred to various electricians.
The Competition Commission considered whether the practice of inserting tokens in cable packs without due disclosure constituted deceptive marketing practices under Section 10 of the Competition Act.
Following its enquiry, the Competition Commission observed as follows:
it can be deceptive to tell only half the truth, and to omit the rest. This may occur where a seller fails to disclose qualifying information necessary to provide one of his affirmative…
It can also be deceptive for a seller to simply remain silent, if he does so under circumstances that constitute an implied but false representation statement from creating a misleading impression.
when the first contact between a seller and a buyer occurs through a deceptive practice, the law may be violated even if the truth is subsequently made known to the purchaser.
The Competition Commission found that the respondents had violated Section 10 of the Competition Act by resorting to deceptive marketing practices through the non-disclosure of material information regarding cash/cash coupons and had thus misled consumers. This deceptive practice created ambiguity and was found to lack a reasonable basis with regard to the price borne by consumers under Section 10(2)(b) of the Competition Act.
Keeping in mind the cable manufacturers' admission of such practice and their willingness to make visible disclosures on their packaging or discontinue the practice of inserting cash/cash coupons, the Competition Commission imposed a penalty of PRs5 million each on two cable manufacturers (Fast Cables and GM Cables and Pipes) and PRs500,000 each on the remaining 16 cable manufacturers.
Within 60 days from the date of the order, the Competition Commission directed the respondents to:
For further information on this topic please contact Sanaya F Vachha at Vellani & Vellani by telephone (+92 21 3580 1000) or email (firstname.lastname@example.org). The Vellani & Vellani website can be accessed at www.vellani.com.
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Sanaya F Vachha