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Monday May 20, 2024

SC upholds decision on deceptive marketing practices

By Sohail Khan
June 04, 2023

ISLAMABAD: The Supreme Court (SC) has recently issued a judgment reinforcing the prohibition against deceptive marketing practices and unfair competition in commercial and economic activities. A two-member bench, comprising Justice Syed Mansoor Ali Shah and Justice Syed Hassan Azhar Rizvi, dismissed the appeals of the Competition Commission of Pakistan and a food company, saying that they lacked merit. The appeals were filed against the judgment delivered on January 25, 2017, by the Competition Appellate Tribunal, Islamabad.

The Supreme Court emphasised that no individual or manufacturer is allowed to pass off their goods as the goods of another person or company. It further explained that using the same or confusingly similar mark, name, or packaging to represent one’s products as those of a rival manufacturer is unlawful.The judgment, authored by Justice Syed Mansoor Ali Shah, highlighted the importance of business morality, honesty, and fair dealing in preventing deceptive marketing practices and unfair competition.

The court said that distributing false or misleading information that harms the business interests of another undertaking, as well as fraudulently using another’s trademark, firm name, or product labeling or packaging, are wrongful acts.

Citing Article 18 of the Constitution, which grants citizens the right to conduct lawful trade or business, the court acknowledged that trade, commerce, and industry can be regulated in the interest of free competition. To ensure fair competition, the court noted that the Competition Act of 2010 prohibits specific marketing practices categorized as deceptive and empowers the Competition Commission to take appropriate actions against such practices.

The court specifically examined the interpretation of the phrase “fraudulent use of another’s trademark, firm name, or product labelling or packaging” as mentioned in clause (d) of Section 10(2) of the Competition Act 2010. It also sought to elaborate on clause (a) of Section 10(2)(a), which includes the distribution of false or misleading information capable of harming another undertaking’s business interests.

The case involved a complaint filed by a food company against another food company accusing the latter of engaging in deceptive marketing practices by copying the labeling, and trademark. After an inquiry, the Competition Commission initiated proceedings against the food company under Section 30 of the Act, and subsequently imposed penalties for contravention of Section 10.The food company appealed against the order before the Competition Appellate Tribunal, which affirmed the findings of the commission regarding deceptive marketing practices.

However, the Tribunal determined that no false or misleading information had been distributed by the food company, leading to the partial setting aside of penalties imposed under Section 10(2)(a) of the Act. Both the Competition Commission of Pakistan and the food company filed appeals against the Tribunal’s judgment. The Supreme Court ruled that the commission’s appeal was not maintainable, as its quasi-judicial role did not grant it standing to challenge the decision of a higher forum. Ultimately, the appeals were found to be meritless and were dismissed by the court. This judgment by the Supreme Court serves as a reaffirmation of the legal provisions against deceptive marketing practices and aims to foster fair competition in the marketplace.