The Competition Commission of Pakistan (CCP) has issued a directive to clothing and shoe brands, urging them to provide comprehensive and clearly visible disclosures regarding both actual and discounted prices. Failure to comply with this directive may result in enforcement actions by the CCP.
Amid the current surge in seasonal discounts, particularly within the clothing and shoe sectors, the CCP has uncovered instances of deceptive marketing practices. Preliminary investigations indicate that these practices may potentially violate Section 10 of the Competition Act, 2010, which pertains to deceptive marketing.
The CCP’s survey and initial probe have identified 27 brands offering ‘flat’ discounts on their products. However, it was observed that the ‘flat discount’ did not apply to all items, with discrepancies noted between the advertised discount and actual sale prices inside the shops. In many instances, disclaimers about ‘Terms & Conditions’ were either in an illegible font size or completely absent.
Moreover, certain offers, such as ‘Flat 50% plus 20% on bank cards,’ had varying terms for online and retail purchases, leading to confusion and potentially misleading consumers. These inconsistencies were noticed in approximately 96% of the surveyed outlets.
The absence of crucial information in disclosures limits consumers’ ability to make informed decisions. The CCP urged consumers to exercise caution and thoroughly review the terms and conditions of discounts and sales offers to avoid falling prey to deceptive marketing practices.
The CCP has already issued “Guidelines on Section 10: Deceptive Marketing Practices,” which prohibit ‘Bait and Switch Advertising.’ This refers to the act of advertising a product at a low price but charging a higher price at the point of purchase.
These guidelines stress the importance for businesses to ensure clear disclosure of terms and conditions across all media, discouraging the use of fine print disclaimers or qualifications that obscure vital information.
The CCP remains committed to upholding free competition, improving economic efficiency, and safeguarding consumers from anti-competitive behavior in the light of the Competition Act. Businesses are encouraged to adhere to these guidelines to maintain transparency and fair practices in the market.
