The legal spat between OLX and PakWheels will pave way for investments, Industry Experts

A legal battle has ensued between PakWheels and OLX over copyright infringement and intellectual property theft, as reported by Reuters.

OLX has claimed that the biggest automobile classified site of the country has been spamming OLX users and stealing user data and vehicle advertisements for the peer to peer marketplace.

PakWheels, however, has denied all the allegations. They believe the case indicates the desperation of OLX to distract competitors and use their monetary position to hurt local startups. They are contending that no content was stolen from the online marketplace and it is a common trend amongst users to post the same advertisements on multiple websites.

According to the Chief Executive of PakWheels, Raza Saeed, the platform is an established local brand. He said, “Their primary argument is that PakWheels is using the OLX logo to further our brand, which is ridiculous because two competitors will never use each other´s logo. There are countless examples of PakWheel’s logo appearing on the OLX site as well, users must have uploaded the ads using images from their ad on PakWheels.com”

The evidence presented by OLX’s lawyers in the court exhibits OLX watermark appearing on PakWheel’s website indicating trademark violation and copyright infringement.

Copyright is a much more serious issue in western markets, and websites like YouTube and Facebook abide by DMCA (Digital Millennium Copyright Act) to remove all copyrighted material once a complaint is received however no such act exists in Pakistan.

OLX Regional Head of Middle East, North Africa & Pakistan Bilal Bajwa said, “This case is about OLX fighting to protect the privacy of our users as well as our significant investment in marketing”.

Based on court filing and SimilarWeb, an analytics website, OLX publishes classifieds for 14 categories and has spent over 200 crores on marketing activities to increase its user base to 10.8 million monthly visitors. However, the monthly traffic on PakWheels amount to 4.49 million monthly users which fares better as compared to OLX’s userbase that divides across different categories. As per court documents, the projected revenue of OLX was US $0.6 million in 2017 while PakWheels earned over US $1.4 million in the same year.

How will this impact local startup industry to attract foreign investment?

The court ruling has yet to come, and the industry executives are hoping that the proceedings will have a way for the interpretation of local laws on copyright, intellectual property, and consumer protection.

Information Technology is Pakistan’s second largest export worth $2.8 billion as recorded in the last fiscal year. According to the growth indicators, the Ministry of Finance, P@SHA, and industry experts are forecasting it to double in the coming four years. Over 4,000 local technology startups have created employment opportunities for more than 150,000 people. Moreover, local e-commerce sales are expected to hit the $1 billion mark by 2010. In the past few years, Pakistan has also welcomed the presence of foreign companies to operate in the country such as Careem, Uber, Afiniti, Skyelectic, etc. However, foreign companies are still slow to enter the Pakistani market, owing to the vague cyber laws.

Referring to the legal battle between OLX & PakWheels, Shehryar Hadri, Secretary General of P@SHA shares, “It´s not going to open the floodgates of investment overnight, but it´s going to become a benchmark other companies can use. It will definitely make other companies more comfortable.”

Chief Executive of DPL, an IT services company, Syed Ahmed also believes, “The case is a product of increasing competition in a growing market and could have a positive affect and so move Pakistan closer to securing foreign IT investment.”

Pakistan Board of Investment (BoI) has been working rigorously to bring foreign investors to Pakistan. Chairman BoI, Naeem Zamindar wants the local technology sector to grow and has identified that Pakistan is very proactive to deal with issues pertaining to intellectual property and copyright infringements. He acknowledged, “This is an area we are committed to improving. Global tech giants remaining concerned by a negative image problem of Pakistan, is now outdated.”