IHC dismisses telcos' petitions against CCP jurisdiction in deceptive marketing case

The Islamabad High Court (IHC) has upheld the jurisdiction of the Competition Commission of Pakistan (CCP) to inquire into deceptive marketing and anti-competitive conduct in the telecom sector.

The court dismissed the petitions filed by Pakistan’s leading telecom operators.

Justice Inaam Ameen Minhas, in a detailed 19-page judgment, ruled that the CCP lawfully exercised its powers under the Competition Act 2010 in issuing show-cause notices to telecom operators over misleading advertising and additional service charges imposed on prepaid customers.

The court observed that CCP’s statutory mandate extends across all sectors of the economy, including telecommunications, and operates concurrently with the Pakistan Telecommunication Authority (PTA).

The petitions challenged CCP’s show-cause notices issued between 2013 and 2014 against cellular operators for allegedly levying hidden “service maintenance” or “recharge” fees on prepaid cards, a practice that CCP deemed deceptive marketing under Section 10(2)(b) of the Act.

Separately, two companies had also contested notices over the marketing of “unlimited internet packages” that were, in fact, subject to fair usage policies.

In another petition, PTCL had sought to block an inquiry initiated by CCP on allegations of discriminatory pricing in fixed local loop (FLL) services.

Rejecting the telecom firms’ argument that the PTA held exclusive powers to regulate competition in the telecom sector, the IHC in para 22 of the judgement held, “the CCP possesses overarching jurisdiction, across all sectors of the economy, including telecommunications. Its functions are not limited to mere regulation but extend to the prevention and prohibition of anti-competitive behaviour, abuse of dominance, collusive arrangements, and deceptive marketing practices.”

The court ruled that both statutes — the Telecommunication (Re-organization) Act 1996 and the Competition Act 2010 operate in “distinct yet complementary domains.”

While PTA regulates technical and operational aspects, the CCP has the primary authority to address competition-related and deceptive marketing matters.

The judge emphasized that even regulatory bodies like PTA fall within CCP’s ambit, citing Section 2(1)(q) of the Act which defines “undertaking” to include any governmental or regulatory body.

The court also dismissed the writ petitions on grounds of prematurity, noting that CCP’s show-cause notices were procedural and not adverse orders.

Justice Minhas observed that the petitioners had adequate statutory remedies before the Commission, its appellate bench, and the Competition Appellate Tribunal.

“Interference at this initial stage would amount to obstructing a statutory body from performing its lawful functions and would jeopardize the intent of the legislature behind the Competition Act 2010,” the judgment stated.

Holding that the CCP was within its powers to investigate deceptive and anti-competitive practices in the telecom sector, the IHC dismissed all seven connected petitions as “not maintainable.”