Tesco considers appeal against compensation order

Big C Supercentre has won the battle against its arch-rival Tesco Lotus, which has been ordered to pay Bt4 million damage compensation for unlawful marketing campaigns launched in 2011.

The Civil Court yesterday ruled that Tesco Lotus was guilty of violation of Article 421 of the Civil Code, following two major marketing campaigns years ago. The court also awarded the damage compensation of Bt2.46 million to Big C Supercentre and Bt1.5 million to Cencar. 

While Big C hopes this ruling will pave the way for a similar verdict by the Trade Competition Committee, Tesco Lotus is considering appealing the decision, believing its campaigns were in line with the law and beneficial to consumers.

The case served as a victory for Big C Supercentre and Cencar, its shareholder, which brought the case to the court on August 15, 2011. In the civil lawsuit against Ek-Chai Distribution System, which operates Tesco Lotus, both companies said Tesco Lotus committed unfair trade practices and interference with the business of others by openly conducting two major marketing campaigns on separate occasions that were based on unauthorised use of logos, marketing tools and marketing mechanisms belonging to Big C without proper consent and authorisation. The campaigns’ aim was to generate sales and increase Tesco’s customer database at Big C’s expense, the court found. 

“Big C respects the Court’s verdict and hopes that this case shall be a study into the standard and proper conduct of marketing that all companies should adhere to for the long-term benefits of consumers,” Big C said in a statement.

It also hoped the outcome of this case would lead to the enactment of the Trade Competition Act for the first time since 1999 – which would reflect the important role of the Act in the promotion of competition through business conduct that was fair, creative, positive and respectful to business peers in the future. 

It hoped that the Trade Competition Committee would take the Civil Court’s ruling on this case into consideration when it deliberates it. 

Meanwhile, Tesco Lotus said in its statement that it’s pleased with yesterday’s court ruling that the Competition Law was not violated. The company is a strong supporter of an effective competition policy that works in the consumer interest, the statement said. Competition brings benefits to consumers through greater choice, lower prices, better quality and improved service. 

However, the company disagreed with the court’s decision that its marketing activities caused harm to the plaintiffs and its award of compensation at around Bt4 million (against claims of Bt416 million). In 2011, Tesco Lotus launched marketing campaigns which gave greater choice and benefit to Thai consumers, it claimed. 

It insisted that through 18 years of existence, it has conducted all sales promotions and campaigns transparently and in full compliance with local laws.