The Competition Commission of Pakistan (CCP) has launched an inquiry into potentially anti-competitive practices in Pakistan’s e-commerce landscape, following complaints against global e-commerce platform Temu. This development highlights the CCP’s growing assertiveness in regulating digital markets and enforcing the provisions of the Competition Act, 2010.

Key Issues Under Investigation

The CCP’s probe was prompted by concerns that Temu’s aggressive market entry strategies—including steep discounting, tax avoidance through the “De Minimis” regime, and misleading marketing—may be in breach of Pakistani competition law. The inquiry will examine the following potential violations:

• Abuse of Dominance (Section 3)
  The Commission is assessing whether Temu’s below-cost pricing amounts to predatory pricing designed to eliminate domestic competitors—an abuse of dominant position prohibited under Section 3 of the Competition Act, 2010.
• Deceptive Marketing Practices (Section 10)
  A significant part of the inquiry involves possible violations of Section 10, which prohibits undertakings from engaging in misleading or false advertising, deceptive pricing claims, or the provision of unjustified guarantees. Reports suggest that Temu may be using aggressive discount marketing, “risk-free” purchase claims, and foreign currency billing in ways that could mislead consumers.

Institutional and Industry Response

The investigation was initiated after complaints by stakeholders including the Chainstore Association of Pakistan (CAP) and individual sellers. CAP has also called for coordinated enforcement by the Federal Board of Revenue (FBR), State Bank of Pakistan, Ministry of Commerce, and logistics firms to ensure regulatory compliance in the e-commerce space.

This case follows a series of recent enforcement actions by the CCP targeting deceptive practices in real estate, telecommunications, and fast-moving consumer goods (FMCG) sectors, reflecting the Commission’s increased focus on consumer protection and market fairness.

Legal and Regulatory Significance

This action underscores the CCP’s statutory role in maintaining competitive markets under the Competition Act, 2010. Sections 3 and 10 give the Commission broad powers to investigate and penalize:

• Predatory or exploitative conduct by dominant players;
• Misleading or deceptive marketing that harms consumer interests.

If violations are established, the CCP may issue cease-and-desist orders, impose monetary penalties, or recommend regulatory reforms to address structural gaps in enforcement—especially in cross-border digital commerce.

Implications for Businesses

The CCP’s scrutiny serves as a reminder to all market participants—whether domestic or foreign—that compliance with Pakistan’s competition regime is essential. E-commerce platforms in particular must ensure that their pricing strategies, marketing representations, and tax practices align with local laws to avoid regulatory risk.

For further insights on competition law compliance or digital market regulation in Pakistan, please feel free to contact us at Legum.