The Competition Commission of Pakistan (CCP) has observed that the companies should be stopped from marketing their products in an unfair and misleading manner, as the deceptive marketing practices have a direct impact on the public at large.
The Competition Commission of Pakistan has again emphasised that the deceptive marketing practices have a direct impact on the public at large and, therefore, it is in the interest of the general public and fair competition in the market that the undertakings should be stopped from marketing their products in an unfair and misleading manner and be encouraged to resort to marketing practices which are transparent and give consumers true and correct information. These observations are from the latest enquiry report issued by the CCP.
The enquiry has been conducted on the complaint of an international online platform operating in Pakistan against a local online forum dedicated to the automobile sector.
The CCP received a formal complaint from M/s OLX which is a Dutch Company operating in Pakistan from 2015 alleging that PakWheels has distorted healthy competition in the market by engaging in fraudulent use of their registered trademark along with distribution of false and misleading information to consumers which is capable of harming their business interest.
The OLX alleged that during early part of 2017 without their authorisation, PakWheels had copied and reproduced on its website several advertisements, photographs and descriptions originally posted on the OLX website and also containing the OLX registered trademark OLX logo. The PakWheels had reproduced the same on its website www.pakwheels.com and continues to do so.
The CCP formed an enquiry committee on this matter and according to CCP's enquiry report, M/s OLX provides a platform for buyers and sellers to sell and purchase second hand products and also certain services to interact with each other. It is easily possible for any seller to upload a free advertisement for anything ranging from used cars to mobile phones, clothing and more. Similarly, interested buyers are able to search for products and services that they require and contact the relevant seller to carry out actual sale offline.
The OLX complaint was forwarded to the PakWheels by the CCP's enquiry team and they vehemently denied all allegations of the OLX as baseless and frivolous. They also submitted that PakWheels name www.pakwheels.com was registered in 2002 and was founded in 2003 and is a Pakistan's top automotive portal.
The CCP enquiry found that in this particular case it is impossible to investigate previously dated evidence as true or false due to the nature of the complaint. The listings are posted on the website by general sellers, whereby at contact with the right buyer the transaction is made and the listing is removed from the website. Due to this constraint, the enquiry committee was not able to verify the evidence of excerpts provided by the OLX displaying the alleged infringement. However, the referred evidence was made as a basis to further investigation of a similar nature.
The CCP enquiry team constantly visited the PakWheels website and after going through multitudes of listings, the enquiry committee was able to find an instance on the PakWheels website where a listing contained photograph watermarked with the OLX logo. Surprisingly, at a closer look, it was observed that the photograph also bore the watermark of the PakWheels along with the OLX.
The CCP enquiry found that the above instance proves that the PakWheels was indeed hosting listings bearing the registered OLX logo.
It is pertinent to mention here that the PakWheels has not counter-alleged that the OLX is also engaged in the copying and reproduction of the PakWheels listings on its website. However, the PakWheels has vehemently denied being involved in the act itself.
PakWheels, however, does raise the possibility that the listings may have been uploaded on the OLX website by the complainants through mala fide intent of harming the respondent's business. This can be taken into consideration as a possibility; however, the enquiry committee observed that the reply/comments of the PakWheels did not contain any evidence to back the bold claim.
It is pertinent to consider that the OLX had submitted a list of up to 2,500 listings from the PakWheels website with identified URL's as supporting evidence. Therefore, when the complaint was forwarded to the PakWheels along with its annexures, they have been in an easy tracing down those 2,500 referred listings and provide evidence that the listings had indeed been loaded by the OLX themselves on the PakWheels website with mala fide intent.
According to CCP's enquiry, in the presence of evidence in support of the allegations made within the complaint, it is apparent that the PakWheels has prima facie used the OLX registered trademark, descriptions and photographs form OLX listings without consent or authorisation in violation of Section 10(1) of the Act, in terms of Section 10(2) of the Act, which prohibits fraudulent use of another's registered trademark, firm name, product labeling and packaging.
The listings copied and reproduced by the PakWheels from the OLX page were unauthorised, the same falls under distribution of false and misleading information to consumers in terms of properties and place of production. Place of production, in this particular Enquiry Report, is taken in the meaning of the place of service provider or platform of service delivery.
The Enquiry Committee also brings to light the submission of the PakWheels that it has been engaged in the said business for over 14 years, and that the OLX is a fairly new entrant which started its operations in Pakistan in 2015. However, the subject matter of the complaint and this enquiry report are not mandated to ascertain which of the entities is more able and efficient than the other.
Thus, the submission is irrelevant to the allegations raised within the complaint.
Therefore, the PakWheels is, prima facie, allegedly found engaged in distributing misleading information to the consumers related to the properties and place of production of goods, in violation of Section 10(1) of the Act, in terms of Section 10(2)(b) of the Act.
This enquiry report found that it appears that the PakWheels has allegedly used the Complainants' registered trademark OLX, copyrighted OLX Logo, descriptions and photographs from complainants' listings without consent or authorisation, in violation of Section 10(1) of the Act, in terms of Section 10(2)(d) of the Act.
Similarly, the PakWheels is allegedly found engaged in distributing false and misleading information to the consumers related to the properties and place of production, in violation of Section 10(1) of the Act, in terms of Section 10(2)(b) of the Act. Furthermore, the PakWheels conduct is also found to be capable of harming the business interests of the complainants, in violation of Section 10(1) of the Act, in terms of Section 10(2)(a) of the Act.
Therefore, in the light of abovementioned findings, the CCP recommended to initiate proceedings under Section 30 of the Competition Act against M/s PakWheels (Pvt) Ltd for, prima facie, violation of Section 10 of the Act.
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