Advertising can distort competition when it gives a business an advantage through false claims, misleading comparisons, concealed material information or misuse of another business’s identity.
Section 10 of the Competition Act, 2010 prohibits deceptive marketing practices. It is not confined to dominant undertakings, nor does its application depend on proving a cartel or restrictive agreement. The central issues concern the representation, its audience, its context and the requirements of the particular statutory prohibition. (CCP: Deceptive marketing)
The Four Statutory Categories
Section 10(2) addresses four forms of conduct:
- False or misleading information capable of harming another undertaking’s business interests.
- False or misleading information to consumers, including information lacking a reasonable basis concerning matters such as price, quality, origin, properties or suitability.
- False or misleading comparisons in advertising.
- Fraudulent use of another’s trademark, firm name, product labelling or packaging.
These categories overlap in some cases but are not identical. A complaint should identify the applicable clause and establish its requirements, rather than assume that every objectionable advertisement violates all four. (CCP: Deceptive marketing)
The Overall Impression Matters
The CCP’s 2023 Guidelines on Deceptive Marketing Practices emphasise the overall impression conveyed to the ordinary consumer. Assessment is not confined to isolating one technically accurate sentence from an otherwise misleading presentation.
A headline, image, price display and qualification should be considered together. A small disclaimer may fail to correct a misleading principal message. Material omissions can also matter where the missing information would affect the consumer’s understanding or decision. (CCP: Deceptive Marketing Guidelines, 2023)
For practical review, ask what an ordinary member of the intended audience is likely to understand from the advertisement as actually presented—not what a lawyer could reconstruct after reading several separate documents.
Claims Need an Adequate Basis
Section 10 expressly addresses information lacking a reasonable basis. The supporting basis should exist when the claim is made; an advertiser should not assume it can first publish a factual claim and search for substantiation afterwards.
Statements about measurable performance, scientific benefits, guaranteed outcomes, approval or market leadership require evidence appropriate to the claim. Broad promotional language and objectively verifiable assertions should not be treated as the same thing. (CCP: Deceptive Marketing Guidelines, 2023)
As a compliance measure, retain the supporting study, its date, methodology and limitations. Check whether the advertisement fairly describes what the evidence actually establishes.
The same review should cover online advertising, endorsements and influencer campaigns. A material relationship behind an endorsement may require disclosure; presenting incentivised promotion as independent customer opinion can create a misleading impression. (CCP: Deceptive Marketing Guidelines, 2023)
Misleading Comparisons
Comparative advertising is not inherently prohibited. Section 10(2)(c) addresses false or misleading comparisons.
For a proposed comparison, practical questions include whether the products are genuinely comparable, whether the data remains current and whether the advertisement fairly states the conditions of the test. A selective comparison can be misleading even though an individual number has been copied accurately.
An advertisement should not imply superiority across every important characteristic when the evidence concerns only one narrowly defined feature. The statutory question remains whether the comparison, as communicated, is false or misleading. (CCP: Deceptive marketing)
Brand Names, Packaging and Passing Off: A. Rahim Foods
In A. Rahim Foods (Pvt.) Ltd. v. K&N’s Foods (Pvt.) Ltd., PLD 2023 SC 516, the Supreme Court examined misleading similarity in product presentation and the operation of section 10(2)(d).
The judgment recognises protection against the relevant form of passing off without making trademark registration an indispensable prerequisite. It also directs attention to the impression on an ordinary, unwary purchaser rather than an expert’s detailed side-by-side comparison. (PLD 2023 SC 516)
Accordingly, the inquiry should address the overall presentation and the established identity or goodwill allegedly appropriated. A complaint should nevertheless distinguish the requirements of brand misuse under section 10(2)(d) from those of harmful false information under section 10(2)(a).
A Foreign Brand Without Local Outlets: Options International
In Options International (SMC-Pvt.) Ltd. v. Competition Commission of Pakistan, PLD 2024 SC 899, the Supreme Court considered unauthorised use of the Starbucks identity.
The Court rejected the argument that the absence of Starbucks outlets in Pakistan eliminated the competition concern. The challenged representation could mislead the public and give the undertaking an advantage over businesses competing in Pakistan. (PLD 2024 SC 899)
The decision should not be reduced to a rule dispensing with proof of every brand-related claim. Its practical importance is that the absence of the foreign brand’s own local outlet is not, by itself, a complete defence to deceptive use of its identity.
Concealed Incentives: Nation Cable
In Nation Cable v. Competition Commission of Pakistan, 2023 CLD 1501 (Competition Appellate Tribunal), the dispute concerned coupons concealed in cable products that benefited electricians without adequate disclosure to consumers.
The Tribunal upheld the adverse determination and addressed disclosure-based corrective requirements. The case illustrates how an undisclosed incentive can affect purchasing recommendations and consumer choice even where the issue is not an expressly false technical claim about the product. (2023 CLD 1501 (Competition Appellate Tribunal))
The broader compliance lesson is to examine how incentives affect the apparent independence of advice given to customers.
Does the Complainant Have to Prove Completed Loss?
The statutory language and the CCP’s guidance allow scrutiny of conduct capable of misleading or harming the relevant interests; completed financial loss is not invariably necessary to establish a marketing contravention.
That does not eliminate the need for evidence. The alleged representation, its meaning and its connection to the relevant statutory clause must still be demonstrated. Nor does the position in CCP proceedings establish the evidential requirements for a separate claim seeking personal compensation. (CCP: Deceptive Marketing Guidelines, 2023)
For practical preparation, preserve the advertisement as published, its date and platform, packaging, screenshots, purchase documents and the evidence said to contradict the claim. Retain the whole communication, including qualifications, rather than only an extract favourable to one side.
How Can the CCP Become Involved?
Section 37 permits own-motion inquiries. Its express written-complaint route includes complaints from an undertaking or registered consumer association, subject to the statutory screening requirements.
An individual consumer can provide information that may prompt regulatory examination. However, supplying information, qualifying under a particular formal complaint procedure and bringing a personal compensation claim are distinct matters.
Where the matter proceeds to adjudication, the CCP must follow the applicable notice-and-hearing process under section 30. The distinction between inquiry and enforcement recognised in Competition Commission of Pakistan v. Dalda Foods Ltd., 2023 SCMR 1991 remains relevant.
What Remedies Are Available?
Under section 31(c), the CCP may require action necessary to restore previous market conditions and prevent repetition. The provision also addresses confiscation, forfeiture or destruction of goods having hazardous or harmful effects.
Depending on the established contravention and appropriate order, corrective action can involve stopping the representation, changing labelling or advertising and making disclosures. Nation Cable provides a reported example of disclosure-based relief. Interim orders may also be considered under section 32.
Section 38 permits a Chapter II penalty of up to PKR 75 million or 10% of annual turnover, as determined in the circumstances. Continuing violation of a CCP order can produce additional daily penalties under the separate statutory provision.
CCP Proceedings, Consumer Claims and Intellectual Property Remedies
The appropriate remedy depends on the problem.
A business seeking cessation of misleading market conduct may consider CCP proceedings. A purchaser seeking a refund or compensation should examine the applicable consumer legislation. A dispute concerning ownership, infringement or other intellectual property relief may also require proceedings under the relevant IP framework.
These routes should be coordinated rather than treated as interchangeable. A CCP fine does not automatically compensate an affected purchaser or trademark owner. Section 47 should not be mistaken for a general power to award private damages.
The Sindh Consumer Protection Act, 2014 separately addresses misleading representations and consumer remedies. A party considering more than one route should identify the relief sought in each and comply with the applicable notice and limitation requirements. Do not assume that a regulatory complaint preserves every deadline in another forum.
Conclusion
Effective advertising compliance requires more than avoiding statements that are literally false. The claim’s overall impression, evidential basis, qualifications, comparisons and use of another business’s identity all require attention.
Legum Law Firm’s Competition and Antitrust Law and Intellectual Property Law practices advise on advertising compliance, deceptive-marketing complaints, packaging disputes and related proceedings in Pakistan.
This article provides general information. The applicable statutory provisions, jurisdiction, evidence and available remedies should be examined before commencing or responding to proceedings.
