Competition Appellate Tribunal Upholds CCP Penalty Against Cable Manufacturers

The Competition Appellate Tribunal (CAT) has dismissed the appeals filed by electric cable manufacturers against the Competition Commission of Pakistan’s (CCP) order, which fined these manufacturers for hiding cash coupons in their products without informing consumers.

CCP enquired against 18 electric cable manufacturing companies for inserting cash/cash coupons inside bundles of electric wire without disclosing this on the packaging or promotional material. This practice only benefited electricians who typically opened the packs, deceiving end consumers who paid for the value of the coupons without being aware of it.

During the hearings, most of these manufacturers admitted to the deceptive practice and committed to ceasing it in the future.

On 26 March 2019, CCP imposed penalties of Rs. 5 million each on M/s. Fast Cables and M/s. G.M Cables, and Rs. 500,000 each on M/s. E-flux Cable, Gold Royale Cable, Hero Cables, Alfa Plus Wires & Cables, and Falcon Cables for engaging in deceptive marketing practices by distributing false and misleading information to consumers, in violation of Section 10 of the Competition Act, 2010. These companies had deceptively inserted tokens/cash coupons in their product packaging without disclosing their existence, at the expense of consumer benefit.

The companies appealed the CCP’s order before the Competition Appellate Tribunal. After hearing the parties at length, the Tribunal dismissed the appeals filed by M/s. E-Flux, Gold Royale Cables, Hero Cables, Alfa Plus Cables, and Falcon Cables, without modifying the penalties imposed by the CCP. However, the appeals filed by M/s. Fast Cables and G.M Cables were partially upheld, with the penalties reduced to Rs. 500,000 each.