Background of the case:

The Commission received a complaint from M/s Pakistan Dairy Association (the Complainant) wherein it was alleged that the M/s At-Tahur (Pvt.) limited (the Respondent) ,soon after the pronouncement of the Order by the Honorable Supreme Court dated 08 December 2016, started disseminating false and misleading information through its Facebook page by the name of ‘Prema Milk’ with the ulterior motive of making inroads into the market share of other milk brands, which amounts to deceptive marketing practices.

Subsequent, to the preliminary assessment of the matter, an enquiry was initiated to probe into the matter. The Enquiry concluded that the Respondent was involved in distribution of false and misleading information that lacked a reasonable basis along with making false comparisons related to the character, properties, suitability for use and quality of its product which was also capable of harming the business interest of other undertakings. Such deceptive conduct of the Respondent amounted to a prima facie violation of Section 10(1), in terms of Section 10(2)(a), (b) and (c) of the Act.

Issues:

a) Whether the Complainant is an undertaking in terms of the provisions of section 2(1)(q) of the Act?

b) Whether the Complainant is duly authorized to file the complaint with the Commission under Section 37 of the Act?

c) Whether the Respondent has violated the provisions of Section 10 of the Act?

Foreign Judgment:

i) Better Living, Inc. et al, 54 F.T.C. 648

ii) Re the Boston Beer Co. Ltd Partnership 98 F.3d 1970 (Fed. Circ. 1999)

iii) Am. Italian Past C o. v/s New World Pasta Co., 371 F.3d, 387, 391 ( 8th Cir, 2004)

iv) Bisset v/s Wilkinson [1927] AC 177

v) Spiller v Joseph [2010] UKSC 53

vi) C-396/96P Compaginie Maritime Belge and others v Commission [2000] ECR I-1365

vii) Michelin v Commission (1983) ECR 3461

viii) U.S. v/s. National Lead Co. et al 332, U.S 319, 340, 67 St. S. Ct. 1634

ix) Gut Springenheide GmBH and Rudolf Tusky v Oberkreisdirektor des Kreises Steinfurt – Amt fur Lebensmitteluberwachung, Case C-210/96, ECR 1998 I-04657

x) Pizza Hut, Inc. v. Papa John’s Int’l – 227 F.3d 489 (5th Cir.2000)

xi) Guranga Mohan Sikandar vs. Controller of Import and Export, PLD 1970 SC 158

xii) East and West Steam ship Co. v. Queensland Insurance Co., PLD 1963 SC 663

xiii) Epand, Inc. And Ayman A. Difrawi 2016, Case No: 6:16-cv-714-Orl-41TBS

xiv) Newcal Industries v. Ikon Office Solution 513 F.3d 1038 (2008)

xv) KFC Corp., 138 F.T.C. 442 (2004)

xvi) Novartis Corp. v. FTC, 223 F.3d 783 (D.C. Cir. 2000)

xvii) London International Group, 125 F.T.C. 726 (1998)

xviii) Kraft, Inc., 114 F.T.C. 40 (1991), aff d, 970 F.2d 311 (7th Cir. 1992), cert. denied, 507 U.S. 909 (1993)

Order:

The Commission noted that the Pakistan Dairy Association i.e., the Complainant, is an association of entities, who are undertakings engaged in the production, distribution and supply of dairy products and ancillary food items. Hence, the Complainant is an association of undertakings and is therefore an undertaking in terms of Section 2(1)(q) of the Act.

The Commission further noted that the Memorandum and Articles of the Complainant gave ample powers to the Executive Body to take appropriate action, including initation of legal proceedings before the Commission for alleged violation of the Act, and they also empowered the Executive Board to nominate any representative to carry out such functions as may be authorized.

The Commission held that the Respondent had engaged in deceptive marketing practices prohibited under Section 10 (1) of the Act read with Section 10(2) (a),(b) & (c) of the Act by, among other things, advertising and representing that all other samples of dairy producers, apart from the ones taken from PREMA, were found unfit for human consumption. The Commission observed that any ordinary consumer, after considering the holistic view of the marketing campaign of the Respondent, would gather the net impression that the products of the members of the Complainant are unfit for human consumption while PREMA is not, for which there is no legal basis.

The Respondent also attempted to rely upon the defense of puffery, but the Commission held that generally puffery is based on an expression of opinion and not made as a representation of fact. Hence, ‘puffing’ is generally vague and unquantifiable whereas any statement of fact which is quantifiable and specific in characteristic is not ‘puffery’.

It was further held that a lenient view in respect to the Respondent ccould be adopted as the Respondent deliberately withheld the information from the consumers and on its own declared the products of all other competitors to be unhygienic and unhealthy for human consumption. It was further noted that the disregard of the applicable law and the consumer welfare wasalarming and it must be ensured that such conducts was dealt with iron hands and not ignored. Hence a penalty of Rd. 35,000,000/- (Rupees Thirty Five Million Only) was imposed on the Respondent. The Respondent was further directed to make public announcement, in respect to the discrepancies within their marketing campaign, as being false and misleading.

Current Status:

The Respondent in the instant matter, challenged the vires of the Act at the Lahore High Court, which has been decided by the same. Appeals by the Respondent, have further been submitted before the August Supreme Court of Pakistan and the Competition Appellate Tribunal, however no stay order in respect to the administration of the instant order has been granted.