CCP issues show cause to teleco for unethical marketing

ISLAMABAD: The Competition Commission of Pakistan (CCP) has issued show cause notice to Telenor Pakistan for allegedly running deceptive marketing campaign to attract customers for using 4G services as free giveaway.

According to the CCP’s announcement made here on Thursday, the Commission issued show cause notice to Telenor Pakistan for prima facie violating Section 10 of the Competition Act 2010 by deceptively marketing the price and geographical availability of its 4G services.

ZONG Pakistan sent a formal complaint against Telenor to the CCP saying that its 4G marketing campaign was wrongly claiming that “Telenor 4G services absolutely free” and that “4G services available across Pakistan.” Zong said that Telenor was not only misleading consumers but also harming the business interest of its competitors.

A two-member team conducted a detailed inquiry and prepared 39-page report and concluded that this inquiry report established that the conduct of the respondent (Telenor Pakistan) amounts of distribution of false and misleading information to customers through “distribution of false and misleading information” regarding 4G services which was “lacking a reasonable basis”, related to price, as chargeable service was being marketed as a free giveaway; properties of the services in terms of geographical availability as well as its price; and “sustainability for use” pertaining to unavailability for its 4G services for customers use in prima facie violation of section 10 (1) read with sub section 2, clause (b) of the act.

CCP’s enquiry found that against the claim of providing “Telenor 4G services absolutely free”, Telenor was only offering the first 100 MBs of data free of cost. Customers paid for any additional usage after that limit. 

As for Telenor’s claim of “Nationwide Availability/Across Pakistan,” the enquiry report said that this was giving a general impression, albeit wrongly, that 4G services were available across Pakistan. Moreover, the list of seven cities given in the disclaimer, i.e., “Karachi, Lahore, Islamabad, Peshawar, Quetta, Multan, Faisalabad,” where 4G services were available was also misleading as 4G service was only available at select points in these cities.

The enquiry report concluded that the Telenor’s marketing campaign for the above products and services was deceptive and prima facie violated Section 10 of the Competition Act. Furthermore, the illegible disclaimers at the end of advertisements were insufficient and could hardly clarify the above-stated claim to consumers.

A Show Cause Notice has been served on Telenor Pakistan as recommended in the enquiry report.  CCP is mandated under the Competition Act to ensure free competition in all spheres of commercial and economic activity, to enhance economic efficiency and to protect consumers from anti-competitive practices including deceptive marketing practices.