September 28 2017
The Competition Commission recently conducted an enquiry and initiated proceedings against Proctor & Gamble Pakistan (Private) Limited following a complaint for deceptive marketing practices filed by Reckitt Benckiser Pakistan Limited. The commission found that the respondent had violated Section 10 of the Competition Act 2010 by resorting to deceptive marketing practices.
The complainant, Reckitt Benckiser Pakistan Limited, is a multinational consumer goods company that provides pharmaceutical, hygiene and household products. It commenced operations in Pakistan in the 1950s. The respondent, Proctor & Gamble Pakistan (Private) Limited, is a multinational company that is involved in the production of consumer goods. It commenced operations in Pakistan in 1991. The complainant and respondent are involved in the production and marketing of anti-bacterial soap under the brand names Dettol and Safeguard, respectively.
The respondent ran an ad campaign, including television ads and outdoor marketing, which claimed that Safeguard was "Pakistan's No. 1 rated Anti-bacterial Soap" along with a disclaimer in fine print that this claim was "Based on [a] product in use test by AC Neilson in April 14 amongst 600+ consumers". Further, a doctor appearing in the television ad suggested that Safeguard protects against germs that cause influenza.
In its objection, the complainant alleged that the marketing material and advertising claim lacked a reasonable basis to substantiate such a claim and, as such, it was tantamount to the dissemination of false and misleading information to consumers (and to the detriment of its competitors) in violation of Section 10 of the Competition Act. In support of its allegation, the complainant submitted AC Nielson's data reflecting the market share in terms of the value and volume of three leading anti-bacterial soaps in Pakistan, which clearly indicated that Safeguard was not the primary leading brand in terms of market share value or volume.
The Competition Commission considered whether:
With regard to the claim having reasonable basis, the Competition Commission concluded that the concept of reasonable basis requires that an advertiser must, before disseminating information, have a certain level of prior substantiation for the claims made. In this regard, the commission observed the following:
"the concept of reasonable basis … provides that the advertiser must have had some recognizable substantiation for the claims made prior to making it in an advertisement. Moreover, in order to determine the general net impression of the claim, the claim cannot be evaluated as an isolated script."
With regard to the obviousness and appropriateness of the disclaimer in the respondent's Safeguard ad, the commission observed as follows:
The Competition Commission concluded that Proctor & Gamble had violated Section 10 of the Competition Act by resorting to deceptive marking practices through:
Considering the violation of Section 10 of the Competition Act and the fact that the respondent had withdrawn the ad campaign, the Competition Commission imposed a penalty of PRs10 million and ordered the respondent to:
Failure to comply with the commission's directions could result in the imposition of additional penalties.
For further information on this topic please contact Sanaya F Vachha at Vellani & Vellani by telephone (+92 21 3580 1000) or email (firstname.lastname@example.org). The Vellani & Vellani website can be accessed at www.vellani.com.
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