Pakistan

CCP Cracks Down on Deceptive Discounts by Clothing and Shoe Brands

The Competition Commission of Pakistan (CCP) has issued a stern warning to clothing and shoe brands that are engaging in deceptive marketing practices by offering misleading discounts to consumers.

The CCP, which is the statutory body responsible for enforcing the Competition Act, 2010, has found that many brands are violating Section 10 of the Act, which prohibits deceptive marketing practices that may harm consumers or competitors.

According to a CCP advisory, the Commission conducted a survey and a preliminary investigation of 27 brands that were offering ‘flat’ discounts on their products during the ongoing seasonal sales.

However, the CCP discovered that the ‘flat’ discounts did not apply to all items, and that the actual sale prices inside the shops were lower than the advertised discounts outside.

The CCP also observed that the brands did not provide clear and visible disclosures of the actual and discounted prices on the sale items, and that the terms and conditions of the discounts were either illegible, incomplete, or absent.

Furthermore, the CCP noted that some brands had different terms and conditions for online and retail purchases, such as ‘flat 50% plus 20% on bank cards’, which created confusion and potentially misled consumers into making uninformed purchases.

The CCP found that these discrepancies were present in approximately 96% of the outlets surveyed, and that they hampered consumers’ ability to make informed decisions.

The CCP has warned the brands that they may face enforcement actions if they do not comply with the directive to ensure complete and visible disclosures of the actual and discounted prices on the sale items, and to avoid creating false impressions about the goods on offer.

The CCP has also advised consumers to exercise vigilance and to thoroughly review the terms and conditions of the discounts and sale offers before buying anything, to avoid falling victim to deceptive marketing practices.

The CCP has already issued “Guidelines on Section: Deceptive Marketing Practices”, which also prohibit 'Bait and Switch Advertising’2. This is the act of advertising a product at a low price but charging a higher price at the point of purchase.

The guidelines emphasise the responsibility of the undertakings to ensure clear disclosure of the terms and conditions across all media, and to avoid using fine print disclaimers and qualifications that are difficult to read or hide important information.

The CCP said that it remains committed to its mandate under the Competition Act, to ensure free competition, enhance economic efficiency, and protect consumers from anti-competitive behaviour.

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