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Pak Competition Commission set to revise regulations for marketing and advertising by mobiles, broadband

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NEW DELHI: Just as in India, telecom companies in Pakistan are expected to shortly get regulated as far as marketing and advertising is concerned, with the Competition Commission of Pakistan (CCP) revising its previous guidelines to take care of today’s marketing and advertising practices.

According to an official statement, the CCP has issued draft ‘Marketing Practices Guidelines for the Telecom Sector’ pursuant to the provisions of Section 29 of the Competition Act, 2010 earlier this month.

These Guidelines replace the previously issued draft “Deceptive Marketing Guidelines for the Telecom Sector.” The Guidelines have been issued to provide guidance with respect to Section 10  of the Act ‘Deceptive Marketing Practices’ to undertakings providing telecommunications services. The draft regulations cover cellular operators, broadband, Wifi, Internet etc., according to More Magazine of Pakistan.

The draft says, “The distribution of false or misleading information in respect of telecommunication products or services may take any form, be it through the print media, television advertisements, brochures, billboards, banners, advertisements on internet, telemarketing and Short Message Service (SMS) offers, among other means of advertising.”

 The definition of “False Information” includes oral or written statements or representations that: Are contrary to truth or fact and not in accordance with the reality or actuality; Usually imply either conscious wrong or culpable negligence; Have a stricter and stronger connotation than can be justified; and are not readily open to interpretation.

Similarly “Misleading Information” is oral or written statements or representations that are: Capable of giving a wrong impression; Likely to lead to error of conduct, thought or judgment; Tend to misinform or misguide owing to vagueness or any omission; Omission of information is also misleading.  Omission of material information also constitutes deceptive marketing practice.

Omissions include the situations when: A Telco chooses to omit relevant material information in advertisements, this will be considered as false representation.

Half truths may also be considered to be in violation of Section 10, if the effect  of  the  half  truth  is  that  the  consumer  is  misled.  For  example,  not disclosing  that  a  certain  offer,  which  entitles  the  consumer to  get discounted  rates  is  only  available  for  a  limited  period  of  time or not mentioning the date of expiry, may be regarded as violation of Section 10 of the Act.

 The CCP has elaborated in its Orders relating to Section 10 that in case of deceptive marketing practices, it does not have be proved  that any consumer has been actually deceived  by  a  marketing  practice  of  an  undertaking.  It is enough if the marketing practice adopted by an undertaking has the tendency or capacity to deceive a consumer.

It is mandatory on the product seller and service provider to stop using the terms “terms and condition apply” that we normally come across in almost every advertisement in which a company wants to hide actual charges or a certain time period.

“In promoting or advertising a good or service, a telco needs to make its best efforts that all key terms and conditions of the product or service are mentioned in the advertisement. A disclaimer stating “terms and conditions apply” may not be regarded as sufficient.

Disclaimers must be clear,  conspicuous  and prominent  as well in a  font size and colour that  is  readable,  and  not  in  fine  print.  Also, the disclosure must be placed as close as possible to the claim.

Disclaimers in audio messages must be presented in adequate volume and cadence.

Following are further areas where CCP has clearly issued its draft policy.

Misleading Prices

The  practice  of  advertising  prices  of  products  or  services  offered  by  telcos  in  the denomination  of paisas will be regarded as deceptive as  the  one rupee coin is  the lowest recognised unit. Paisas are no longer recognised as legal tender in Pakistan.  Instead of a price being expressed as 90 paisa per minute, for example, it should be expressed as Rs 0.90 per minute.

When  using  words  such  as  “free”,  “gift”,  “given  without  charge”,  or  “bonus”,  telcos should be careful to disclose all relevant terms and conditions of the offer. The product or service  being  advertised  in  such  a  manner  should  be  actually  free  and  the  consumer should not have to pay for that product or service in some other manner.

If  a Telco  uses the word “unlimited” in advertising any telecommunication  service, it has to  clearly  define  what  aspect  of  the  service  the  term  applies  to,  and  also  disclose  any other conditions that may qualify the offer.

Comparisons should only be made between products or services that meet the same needs or that are intended for the same purpose.

Similarly,  bundled  products  and  services  should  be  compared  with  similar  “bundles” offered by a competitor  to prevent any comparison from being misleading or deceptive. Comparisons have to be truthful and meaningful.

Comparative advertising should not in any way discredit the trademarks, trade names or other distinguishing marks of an undertaking.

Telcos when advertising promotions should generally disclose the approximate number or nature of the prize, restrictions on entry or the number of entries, the areas in which the consumers can take part in the contest, any information that may affect odds of winning, etc.

Unlimited Internet and Fair Usage Policy

If  a  Telco  uses  the  word  “unlimited”  in  a  broadband  advertisement,  it  has  to  disclose  in  the advertisement any terms and conditions which apply. Similarly mentioning “Fair Usage Policy Applies” is insufficient as the consumer may not be aware of FUPs of the respective Telco.

Claims should not be made that internet/downloading speed remains constant when it is in fact not the case.

Telcos must explain to the customers that the actual speed they will receive will depend on line quality, distance from exchange, load of traffic, among other factors.

If possible, the number of people using the internet at any given period in time must be estimated and the contention ratio must be calculated.  Internet users must be made aware of this contention ratio through the service provider’s website.

A Typical Speed Range (TSR) representing the range of speed actually achieved by three-fourth of the customers should be used when advertising broadband on the basis of speed.

If a maximum up to speed is used in an advertisement, the Typical Speed Range must be equally highlighted. Furthermore, the up to speed must be achieved by at least half the consumers at any given time.

CCP has asked all the parties to forward their comments and suggestion on the draft guidelines that available on www.cc.gov.pk.

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