CAT Cuts Fine to Rs5 Million in PREMA Misleading Marketing Case

ISLAMABAD: The Competition Appellate Tribunal (CAT) has affirmed the Competition Commission of Pakistan’s (CCP) findings in the PREMA misleading marketing case, ruling that M/s At-Tahur (Pvt.) Limited engaged in deceptive practices. However, the tribunal reduced the original penalty imposed by the CCP.

The PREMA misleading marketing case began after the Pakistan Dairy Association (PDA) lodged a complaint against M/s At-Tahur, the company behind PREMA Milk. The complaint centered on allegations that PREMA ran a campaign on social media following the Supreme Court’s 2016 milk quality ruling, suggesting that all dairy products other than PREMA’s were unsafe for human consumption. This message was deemed unsubstantiated and potentially damaging to competitors.

After a detailed probe, the CCP concluded that PREMA had breached Section 10(1) along with Section 10(2)(a), (b), and (c) of the Competition Act, 2010. As a result, the company was slapped with a penalty of Rs35 million and instructed to publicly clarify its misleading statements.

In its recent judgment, CAT supported the CCP’s decision that PREMA violated competition laws through deceptive marketing. However, the tribunal noted that the fine was disproportionately high given the circumstances. Consequently, it lowered the penalty from Rs35 million to Rs5 million.

The CAT’s decision in the PREMA misleading marketing case underscores the need for businesses to ensure that advertising claims are backed by solid evidence, especially when such statements have the potential to harm market rivals. The ruling also highlights the vigilance of Pakistan’s regulatory bodies in safeguarding fair competition within the country’s markets.