CCP directs brands to make full disclosure on product discounts

F.P. Report

ISLAMABAD: The Competition Commission of Pakistan (CCP) advises shoe and clothing brands offering discounts to ensure complete and visible disclosures regarding actual and discounted prices. Brands violating this directive may face enforcement actions by the CCP.

During the ongoing seasonal surge in discounts, particularly within clothing and shoe brands, CCP uncovered instances of deceptive marketing practices. Preliminary investigations indicate that such practices may violate Section 10 of the Competition Act, 2010, constituting deceptive marketing.

The CCP’s survey and preliminary probe identified 27 brands offering ‘flat’ discounts on their products. However, CCP noticed that the ‘Flat discount’ didn’t apply to all items. The discount advertised outside the shop was higher than the actual sale prices inside. The disclaimer about ‘Terms & Conditions’ had an illegible font size. In numerous cases, ‘Terms & Conditions’ weren’t mentioned at all.

Additionally, certain offers, like ‘Flat 50% plus 20% on bank cards,’ had differing terms for online and retail purchases, leading to confusion and potentially misleading consumers into uninformed purchases. These discrepancies were observed in approximately 96% of the outlets surveyed.

This lack of disclosure containing essential information hampers consumers’ ability to make informed decisions. CCP advises consumers to exercise vigilance and thoroughly review the terms and conditions of discounts and sales offers to avoid falling victim to deceptive marketing practices.

CCP has already issued “Guidelines on Section 10: Deceptive Marketing Practices,” which also prohibit ‘Bait and Switch Advertising’. It is the act of advertising a product at a low price but charging a higher price at the point of purchase.

These guidelines emphasize the responsibility of undertakings to ensure clear disclosure of terms and conditions across all media to avoid creating false impressions about the goods on offer. Fine print disclaimers and qualifications that are difficult to read or hide important information are strongly discouraged.

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