CCP imposes penalty on nine companies for deceptive marketing practices

The Competition Commission of Pakistan (CCP) has imposed a penalty of PKR 2.7 million on nine companies for deceiving consumers by fraudulently using the trademark of another company.

Bahawalpur-based Al-Rehman Oil Mills complained to CCP against nine companies namely Niaz Corporation, Hamza Corporation, Muslim Corporation, Mian Traders, Bahawalpur Oil Mills, Riaz Oil Mills, Baloch Oil Mills, Azhar Kiryana Store, and Waqas Oil Mills for fraudulently using its registered trademark, ‘Taizgaam,’ with slight modifications in their marketing material. The complainant said that this practice by these companies was harming its business interest and its hard-earned goodwill among consumers.

The CCP’s enquiry found that the nine companies were infringing the trademark and imitating the trade dress (packaging size, color combinations, logo design, label design, text, font type, size etc.) of Al-Rehman’s Taizgaam, resorting to copycat packaging or parasitic copying, which is a violation of Section 10 of the Competition Act, 2010. Show cause notices were issued to them on the recommendation of the enquiry report.

During the hearings, majority of these companies expressed their willingness to comply with CCP’s directions. The CCP’s bench imposed a penalty of PKR 300,000 on each of the nine companies for violating Section 10 of the Competition Act and directed them to stop using “Taizgaam” with their products.

The CCP’s order said that parasitic copying of the packaging and labelling of Al-Rehman Oil Mills products was misleading, deceptive, and could harm its business interests. Such conduct was intended to take advantage of the goodwill attached to the complainant’s trademark.  The companies were also directed to file individual compliance reports with CCP within 30 days.

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