In the matter of show cause notice issued to M/s Proctor & Gamble Pakistan (Pvt.) Limited for deceptive marketing practices - (20 Jul 2017)

To prove conduct under Section 10(2)(a) of Competition Act, 2010, it is not necessary to show actual harm to a competitor

MRTP/ Competition Laws

Present order is related to proceedings initiated under Section 30 of Competition Act, 2010 vide Show Cause Notice No. 14/2016 dated 08th March, 2016 issued to M/s Proctor & Gamble Pakistan (Private) Limited (‘Respondent’) pursuant complaint filed by M/s Reckitt Benckiser Pakistan Limited (‘Complainant’) and Enquiry Report dated 26th January, 2016 for prima facie violations of Section 10(2)(a), (b) and (c) read with Section 10(1) of Act. Complainant filed complaint alleging that, Respondent in its marketing and advertising claims has represented Safeguard as Pakistan’s No. 1 rated Anti-bacterial Soap*’ along with a disclaimer/disclosure in fine prints ‘based on product in use test by AC Nielsen in April 14 amongst 600+ consumers’ which tantamount to dissemination of false or misleading information to consumers and competitors’ detriment in violation of Section 10 of Act. Complainant alleged that, Respondent’s marketing material and advertising claim representing Safeguard as ‘Pakistan’s no.1 rated Antibacterial Soap’ lacks a reasonable basis to substantiate claim.

As per the observation in M/s China Mobile Pak Limited (‘Zang Order’), all representations, whether intentional or unintentional which are not easily noticeable or easily understandable to consumers but could influence consumers’ purchasing decision are materially false. All representations, whether intentional or unintentional, that can give false impression or idea, or have the likelihood to induce one’s conduct, thought or judgment, or have the potential to misinform or misguide due to vagueness, or omission, are materially misleading. Concept of reasonable basis necessitates that before disseminating information, advertiser must have a certain level of prior substantiation for claims.

Commission is of considered opinion that, claim Safeguard is ‘Pakistan’s No. 1 rated Antibacterial Soap’ in which word ‘rated’ is written or displayed in significantly smaller font at bottom of ad/TVC, advertising claim thus, creates an impression and/or conveys message that Safeguard is ‘Pakistan No. 1 Antibacterial Soap’ in violation of Section 10(2)(b) of the Act.

Respondent’s disclaimer/disclaimer placed at bottom of the advertisement was neither easily noticeable/legible nor easily understandable by an ordinary consumer. Furthermore, most part of TVG and other marketing and advertising campaigns material was in Urdu, whereas disclaimer/disclosure was in English and appeared for not more than 2 seconds (momentarily) out of a total of circa 30 seconds TVC, which was inadequate to correct deceptive impression of Safeguard as Pakistan’s No. I rated Antibacterial Soap’. In Zong Order, Commission has observed that, ‘even if express or implied representation in an advertisement is accompanied by disclaimers or qualifiers [i.e. disclosures]; such caveat will nullify a misleading [practice] only, if they appear, in such a way as to eliminate advertisement tendency to mislead in its overall effect’. Therefore, Commission opined that, disclaimer/disclosure used by Respondent in its marketing and advertising campaigns itself tantamount to distribution of false and misleading information to consumers in violation of Section 10(2)(b) of Act. Respondent has clearly disregarded Commission’s public notice issued in 2013 to undertakings to ensure that, their marketing and advertising campaigns do not violate Section 10 of Act and in specific making claims, ‘No.1 in Pakistan’ or ‘No.1 Selling Brand’. Respondent’s claim that Safeguard is ‘Pakistan’s No. 1 rated Antibacterial Soap’ essentially creates a net general impression or conveys message that, product is ‘Pakistan’s No. 1 Antibacterial.

Nielsen’s survey which is based on value share and volume share of products and BHT equity tracking data are irrelevant and inconsequential to offset falsity of advertising claim or substantiate advertising claim made by Respondent. Sales material and customer’s or doctor’s testimonials are anecdotal. Claims involving health and safety need to be backed up with scientific evidence. Therefore, rule is that strong product claims require strong evidence to back them up. Section 10(2)(a) of Act, states ‘distribution of false or misleading information that is capable of harming business interests of another undertaking’ constitutes deceptive marketing practice for purposes of Section 10(1) of Act.

Regarding harm to competing business undertakings, Commission has in its Order in Matter of Jotun Pakistan (Pvt.) Limited held that, to prove conduct under Section 10(2)(a) of Act, it is not necessary to show actual harm to a competitor. It is sufficient to show existence of deceptive marketing practice that has potential to harm business interests of competitors Therefore, Commission viewed that, Respondent’s deceptive marketing practices have violated Section 10(2)(a) of Act. Commission imposed a penalty in amount of Rs. 10,000,000/ (Rupees Ten Million Only). Further, Respondent is directed to inform public at large, falsity of its advertising claim that, Safeguard is Pakistan’s No. 1 rated Antibacterial Soap through appropriate clarifications in all Urdu and English dailies and through TV channels and directed to file a compliance report with Registrar.

Tags : CONSUMERS INFORMATION PROVISIONS VIOLATIONS