Islamabad High Court Delivers Major Blow to Telcos in Deceptive Marketing Case

The Islamabad High Court (IHC) has ruled that the Competition Commission of Pakistan (CCP) has full authority to investigate deceptive marketing and anti-competitive behavior in the telecom sector. The court dismissed petitions filed by major telecom companies, including Jazz, Telenor, Zong, Ufone, Warid, PTCL, and Wi-Tribe.

Justice Inaam Ameen Minhas, in a 19-page judgment, said the CCP acted within its legal powers under the Competition Act 2010 when it issued notices to telecom operators for misleading advertisements and hidden charges on prepaid customers. The court noted that the CCP’s authority covers all sectors of the economy, including telecommunications, and works alongside the Pakistan Telecommunication Authority (PTA).

The telecom companies had challenged the CCP’s show-cause notices issued between 2013 and 2014. These notices accused operators of charging hidden “service maintenance” or “recharge” fees on prepaid cards, which the CCP considered deceptive marketing. PTCL and Wi-Tribe were also questioned for advertising “unlimited internet packages” that actually had usage limits.

In another case, PTCL tried to stop a CCP inquiry into claims of unfair pricing in its fixed local loop (FLL) services.

The telecom firms argued that only the PTA could regulate competition in the telecom sector. However, the IHC rejected this claim. The court stated that the CCP has broader powers across all sectors and can take action against unfair competition, abuse of dominance, collusion, and misleading marketing.

The judgment clarified that both the Telecommunication (Re-organization) Act 1996 and the Competition Act 2010 have separate but complementary roles. The PTA looks after technical and operational matters, while the CCP handles competition and marketing issues.

Justice Minhas also pointed out that even regulatory bodies like the PTA fall under the CCP’s scope, as defined in the Competition Act.

The court further ruled that the CCP’s show-cause notices were only part of the inquiry process and not final decisions. Therefore, the petitions were dismissed as premature. The judge noted that the companies still have the right to appeal through the CCP’s own system and the Competition Appellate Tribunal.

The judgment stated that stopping the CCP at this stage would interfere with its legal duties and go against the purpose of the Competition Act 2010.

In conclusion, the IHC confirmed that the CCP has the legal right to investigate deceptive and anti-competitive practices in the telecom industry and dismissed all seven related petitions as “not maintainable.”