ISLAMABAD: The Competition Commission of Pakistan (CCP) has said that businesses should not maintain the same retail prices of identical products since every company has a different production cost and profitability model.
CCP Chairperson Rahat Kaunain Hassan has said that maintaining similar retail rates is a form of price fixing and diminishes consumers’ bargaining power.
“Undertakings must refrain from entering into arrangements of retail price maintenance (RPM) and it was a form of price fixing globally,” Ms Hassan said. “In EU, China, UK Australia, and some states in America, it is considered anti-competitive.”
Speaking at an awareness session at the Overseas Investors Chamber of Commerce and Industry (OICCI) hosted by Unilever Pakistan, she said that unless exempted for any particular efficiency grounds, RPM is generally taken as violative of Competition Law.
She referred to the recent case of RPM amongst electronic home appliance manufacturers where the regulator CCP imposed a combined penalty of over Rs1 billion.
She added that the choice to offer forms of discount or package deals is an important part of the negotiating process with consumers, which should be left to dealers as per their own independent commercial decisions.
The purpose of the session was to sensitise OICCI member companies on the importance of fair marketing practices and the repercussions of violating Section 10 of the Competition Act 2010 for consumers, businesses and the economy in general.
The CCP chairperson said that deceptive marketing practices have a direct impact on consumers and businesses and therefore, firms that are engaged in the business of marketing and selling consumer goods and services must avoid deceptive marketing practices while advertising their products and services.
The objective of the Office of Fair Trade at CCP is not merely deterrence but encouraging compliance and corrective behaviour in enforcing the provisions of section 10.
The chairperson shared that guidelines in light of the commission’s decision/precedence will be issued shortly to lend clarity and help understand the precautionary principles relating to deceptive marketing.
Responding to several questions from the participants, she informed that under the act the undertakings can seek advice and clarity from the CCP on any actual competition matter where any potential violation is apprehended to avoid such violation.
She urged businesses to come forward and flag all aspects where any practice or policy is resulting in competition infringement or market distortions as CCP is committed to providing fair play to businesses.
The CCP emphasised that while designing the marketing campaigns, firms must not make deceptive
claims, hide important/material information, and/or use the competitors’ patent designs, firm name, colour scheme, and registered trademark. Another presentation was also given on the overall framework of the competition act.
Published in Dawn, November 6th, 2022
