Background of the case:

The Complainant (M/s Siba Testing Services) filed a complaint against the Respondent (M/s Sukkur Testing Services (SMC-PVT) limited) in which it was alleged that the Respondent was disseminating false and misleading information to consumers through advertisements in various newspapers, claiming to be Testing Service Provider in the name and style of ‘Sukkur Testing Service (STS)’, which graphically resembles the Complainant as ‘Siba Testing Service (STS)’ and consequently damaged the Complainant’s reputation, and was also capable of harming the business interest of the Complainant.

An enquiry was initiated to probe into the matter, the enquiry report concluded that appeared that the Respondent was fraudulently using the trademark and a firm similar to the Complainant, which prima facie appeared to be deceptive marketing practices in terms of the provisions of Section 10 of the Act, and the said acts were held to be capable of harming the business interest of the Complainant.

Issues:

i) Whether the Respondent has resorted to the deceptive marketing practices in violation of Section 10 of the Act?

Foreign Judgment:

i) Pfizer, Inc., 81 F.T.C. 23 (1972)

Order:

The Commission held that the following aspects needed to be analysed in order to give the Commission’s findings on the instant issue:

i. Consumers: The Commission held that it was clear from a reading of Section 10 of the Competition Act that the ‘consumer’ thereunder is to be construed as an ordinary consumer as opposed to a reasonable or prudent, and that the legislature in all its wisdom had crafted the provision in a manner that it requires the undertakings marketing their products to justify their claim and placed such onus on the concerned undertaking.

ii. False and Misleading Information: ‘False Information’ are oral or written statements that are (a) contrary to truth or fact and not in accordance with reality or actuality; (b) usually implied either conscious wrong or culpable negligence, (c) has a stricter and stronger connotation, and (d) are not readily open to interpretation. Misleading Information may essentially include oral or written statements or representations that are (a) capable of giving wrong impression or idea, (b) likely to lead into error of conduct, thought or judgment (c) tends to misinform or misguide owing to vagueness or any omission, (d) may or may not be deliberate or conscious and (e) in contrast to false information, it has less erroneous connotation and is somewhat pen to interpretation as the circumstances and conduct of a party mat be treated relevant to a certain extent.

iii. The Commission held that for the purposes of determining a violation of Section 10 of the Act, it was important what the net general impression the advertisement conveyed. The Commission noted that the overall net general impression conveyed was that the testing services were identical in nature.

iv. The Commission also held that the representation (or misrepresentation) must be material and that the similar acronym issued by the Respondent might confuse the consumers about the identity of the testing service.

The Commission noted that while the Respondents had violated Section 10 of the Act, the approach of the representative of the Respondents needed to be appreciated as they cooperated throughout the proceedings and the Respondent discontinued the violation during the enquiry and never repeated the same. Keeping in view all the facts and circumstances of the matter in hand, a penalty of Rs.250,000/- (Two Hundred and Fifty Thousand Only.) was imposed on the respondent.

Current Status:

In the instant matter, the compliance of the order has been initiated.