CCP Slaps a Rs. 4.25 Million Penalty on 7 Companies For Deceptive Marketing

The Competition Commission of Pakistan (CCP) has imposed a penalty of Rs. 4.25 Million on seven fabric and packaging companies for deceptive marketing practices and fraudulently using the registered trademark of ShajarPak (Pvt) Limited, a fabric manufacturer.

ShajarPak complained to CCP that eight companies including five fabric manufacturers and three packaging manufacturers for using falsely its registered trademark ‘Pasha Fabrics’ on the packaging and labeling of their products.

These companies are:

1. Ahmad Pasha Collection,
2. Aamir Cloth House,
3. M. Ramazan Fabrics,
4. Pasha the Designer Fabrics,
5. Sufi Cloth House,
6. Baba Plastic,
7. Ahmad Plastic & Dabba House,
8. Kausar Brother Plastic Corner.

ShajarPak further said that the unauthorized and fraudulent use of its trademark by these companies was harming its business interest and deceiving consumers.

CCP Inquiry

CCP’s inquiry established that ShajarPak had not authorized any of the above companies to use its trademark. By copying the trademark and trade dress, these companies were deceiving consumers and harming the business interest of ShajarPak in violation of Section 10 of the Competition Act, 2010. Show cause notices were issued to all of them after inquiry.

The bench disposed off the show cause notice issued to M/s Pasha – The Designer Fabrics over lack of evidence. In view of their filed commitments to comply with the directions of CCP, the bench took a lenient view by imposing a nominal penalty of Rs. 500,000 each on Ahmad Pasha Collection, Aamir Cloth House, Sufi Cloth House and Kausar Brother Plastic Corner for their violation of the law.

However, the bench imposed a penalty of Rs.750,000 each on the other three companies, M. Ramzan Fabrics, Baba Plastic, and Ahmad Plastic & Dabba House, as they did not even appear before the Commission. The companies have been directed to file their compliance reports, and to deposit the penalty imposed with the Registrar of the Commission within 60 days from the date of order.

Deceptive marketing practices have a direct impact on consumers and the public at large. It is in the interest of the public that companies refrain from advertising their products/services in an unfair and misleading manner and adopt advertising practices that are transparent and communicate the correct information to consumers.

CCP is mandated under the Competition Act to ensure a healthy competition in all spheres of commercial and economic activity to enhance economic efficiency and to protect consumers from anti-competitive practices.