Supreme Court Upholds CCP’s Order And Maintains Penalty

ISLAMABAD, (UrduPoint / Pakistan Point News - 13th Aug, 2024) The Supreme Court of Pakistan upheld the Competition Appellate Tribunal's (CAT) order imposing a penalty of Rs 6 million on a local restaurant chain for deceiving consumers by fraudulently using "STARBUCKS" branding for selling its coffee.

STARBUCKS, a globally recognized chain of coffeehouses registered in the State of Washington, filed a formal complaint that the Lahore-based restaurant, Options International, was selling “Starbucks Coffee” while fraudulently using “STARBUCKS MARKS” in its branding, said a press release issued by the Competition Commission of Pakistan (CCP) on Monday.

The Supreme Court ruled that the appellant, “Options International,” put itself forward by selling its products under the international brand name Starbucks and by using its logo, which must have had the effect of distorting competition within Pakistan because a local vendor selling similar products, as those being sold by the appellant, would be at a serious disadvantage and not be able to compete therewith since the understanding public would believe, understand, or perceive the same to be the genuine products of Starbucks.

The CCP’s enquiry concluded that Options International had prima facie deceived its consumers and harmed the business interests of their competitor by disseminating false and misleading information.

During the enquiry, Options admitted to the violation.

In its order, CCP's bench noted that although Options had stopped using STARBUCKS MARKS and committed to complying with the Commission's directions, the unauthorized use of STARBUCKS MARKS spanned a substantial period.

The CCP bench, besides baring M/s Options International from using STARBUCKS MARKS, imposed a penalty of Rs 5 million on M/s Options International.

Additionally, the bench directed Options International to inform the general public through newspaper advertisements for three consecutive days about its fraudulent use of STARBUCKS MARKS.

Options International filed an appeal against the CCP’s order before CAT, which dismissed the appeal and increased the penalty amount from Rs 5 million to Rz 6 million and modified the daily penalty. Subsequently, M/s Options International has filed an appeal to the Supreme Court of Pakistan against the CAT’s order, which the court dismissed.

Using distorted or misleading information and trademarks for marketing of products violate competition laws as it can influences consumer decisions and may prevent them from considering alternative products.