STAFF REPORT
ISLAMABAD: In a series of decisive actions, the Competition Commission of Pakistan (CCP) has imposed significant penalties on multiple companies for engaging in deceptive marketing practices, reinforcing its commitment to ensuring fair competition and protecting consumer rights in the country.
In the most notable case, Unilever Pakistan has been fined PKR 60 million for making misleading claims in television commercials for its hygiene products, ‘Lifebuoy Care and Protect Soap’ and ‘Lifebuoy Hand Wash.’ The CCP launched an inquiry following a complaint by Reckitt Benckiser, which highlighted exaggerated claims by Unilever, such as “100% guaranteed protection from germs” and “World’s No. 1 germ protection soap.” The investigation found that these claims were not substantiated by scientific evidence and that disclaimers were printed in fonts too small to be easily noticed.
The CCP’s order identified five distinct violations of Section 10 of the Competition Act, 2010. It was observed that Unilever’s marketing practices varied across regions, with Pakistan facing the most severe deceptions, which the Commission deemed unacceptable. Along with the fine, Unilever has been directed to submit a compliance report within 30 days to ensure adherence to the CCP’s regulations.
In another significant case, the CCP’s efforts were upheld by the Supreme Court of Pakistan, which maintained a PKR 6 million penalty on Options International, a Lahore-based restaurant chain. The penalty was originally imposed by the Competition Appellate Tribunal (CAT) after Options International was found guilty of fraudulently using the globally recognized STARBUCKS trademark to market its coffee. Starbucks, a renowned coffeehouse chain, had filed a complaint against the restaurant, leading to a CCP investigation that revealed the misuse of the brand name, deceiving consumers and distorting competition.
Despite admitting the violation and halting the use of the STARBUCKS marks, Options International challenged the CCP’s decision. However, the Supreme Court ultimately dismissed the appeal, reinforcing the CCP’s authority and commitment to preventing such deceptive practices.
Lastly, the CCP has also taken action against M/s Diamond Paint Industries (Pvt) Ltd., imposing a PKR 5 million fine for violating Section 10 of the Competition Act. The fine was a result of a complaint by Nippon Paint Pakistan (Pvt) Ltd., which accused Diamond Paint of omitting crucial information in its television commercials for the product ‘Durasilk.’ The CCP found that Diamond Paint failed to disclose the presence and value of redeemable tokens in its TVCs, despite including this information on the product packaging and shade cards, thereby misleading consumers.
The CCP emphasized the importance of transparency in advertising, particularly in television commercials, which are often the first point of contact between consumers and a product. The Commission’s ruling stressed that proper disclosure is essential for consumers to make informed choices and that failure to do so constitutes a violation of consumer rights.
These enforcement actions by the CCP underscore its dedication to maintaining a fair marketplace in Pakistan, ensuring that businesses adhere to advertising standards and competition laws. The penalties serve as a stern reminder to companies about the consequences of engaging in deceptive marketing practices, which not only mislead consumers but also harm competitors and distort market dynamics.
