CCP: (CCP imposes Rs 1 million penalty on paint company for deceptive marketing practices)March 17, 2015
ISLAMABAD: The Competition Commission of Pakistan (CCP) has issued an order imposing a penalty of Rs 1,000,000 (1 Million) on a paint company, Jotun Pakistan (Pvt) Limited, for violation of Section 10 of the Competition Act, 2010, while promoting its products.
The order was passed by a bench comprising Mr. Mueen Batlay, Dr. Shahzad Ansar, and Mr. Ikram Ul Haque Qureshi , Members CCP. CCP initiated an inquiry after receiving complaints from Akzo Nobel Pakistan Limited and Diamond Paint Industries (Pvt.) Limited alleging that Jotun was running a deceptive marketing campaign for its paint products in which it claimed to be ‘No. 1 Paint’ without having reasonable basis.
CCP’s inquiry report found that the claim “No. 1 Paint” publicized by Jotun in its marketing campaign was prima facie in violation of Section 10 of the Competition Act, 2010. On recommendations of the inquiry report, Jotun was issued show cause notice by CCP.
In its order, CCP observed that the claim ‘No. 1 in Paints’ lacked reasonable basis and was therefore false and misleading and was capable of harming the business interests of Jotun’s competitors in the market.
In view of the commitment and compliance undertaken by Jotun during the proceedings, CCP only imposed a penalty of Rs. 1,000,000 (Rupees One Million Only) for the violation, and warned the company that future violations may attract stricter penal consequences. In addition, Jotun has been ordered not to use the claim again in its marketing campaigns.
CCP’s order stated that deceptive marketing practices have given rise to growing concerns within the field of marketing among the general public, consumer welfare bodies and competition agencies. This, in fact, is the very reason behind the establishment of the Office of Fair Trade within the Commission.