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'Deceptive' marketing can't deceive the regulator.

The Competition Commission of Pakistan (CCP) has passed an order imposing a penalty of Rs10 million on Proctor and Gamble Pakistan (Pvt) Limited for deceptively advertising its product 'Safeguard' as 'Pakistan's No 1 rated anti-bacterial soap' in violation of section 10 of the Competition Act, 2010. The order has been passed by a two-member CCP bench comprising the Chairperson Vadiyya Khalil and member Ikramul Haq Qureshi. An inquiry conducted by CCP concluded that the overall net impression of the Safeguard advertisement is that "Safeguard is Pakistan's No 1 anti-bacterial soap", as the word 'rated' is written in a significantly smaller font. Moreover, without a clear and conspicuous disclosure, the advertisement campaign for Safeguard amounts to a violation of section 10 of the Competition Act. On the recommendation of the inquiry report, a show-cause notice was issued to Proctor and Gamble Pakistan.

After hearing the complainant and respondent, the CCP's bench passed the order stating the advertising claims must be based on 'competent and reliable scientific evidence' particularly if the product involves health and safety claims. Besides, the products must carry clear and conspicuous disclaimer/disclosure along with the claims, which the consumers could easily notice and understand. The CCP order found Proctor and Gamble's reliance on studies and surveys to rank itself as Pakistan's No 1 rated anti-bacterial soap irrelevant, materially false, misleading and in violation of section 10 of the Competition Act. In addition to imposing the penalty, CCP has also directed the company to inform the public at large the falsity of its advertising claim through appropriate clarification in all Urdu and English dailies and TV channels for a period of one week from the date of this order.

The CCP has further directed Proctor and Gamble to file a compliance report with the registrar of the Commission within a period of 45 days from the date of issuance of this order.

It is worth mentioning here that the CCP received a formal complaint against PandG from its rival company Reckitt Benckiser Pakistan Ltd, wherein it was alleged that Proctor and Gamble publicised its product "Safeguard" as "Pakistan's No 1 rated anti-bacterial soap" even though it lacked reasonable basis to substantiate the claim. While referring to the CCP's public notice published in leading newspapers which warned companies to comply with the provisions of section 10 when advertising their products, Reckitt Benckiser alleged that Proctor and Gamble disregarded the CCP's warning by running an advertisement campaign for Safeguard, which was not only misleading consumers but also harming the business interests of its competitors. The message reproduced hereinabove flashes on the TV screen momentarily. The TVC portrays a typical household scene in which two children and (their) mother are talking about how flu and cold (influenza) are epidemics in winters.

The conversation between the three characters suggests that the use of 'Safeguard' can protect them from germs causing influenza, among other things. It is then endorsed and further explained by a doctor, who states that the spread of flu and cold is rampant in winters. He then goes on to state that Safeguard is Pakistan's No 1 anti-bacterial soap, which provides protection against germs causing flu and cold. The TVC ends on this note with set vocals and image (a shield badge) claiming that Safeguard is a well-recognised number one anti-bacterial soap in Pakistan. To support its case, the complainant submitted AC Nielson's (hereinafter 'Nielson') data reflecting the market share in terms of value share and volume share of the leading anti-bacterial soaps in Pakistan, which is reproduced as under:

Anti-bacterial bar soaps category year-to-date MJ '14 value share volume share Dettol (RandB) 9.3pc, 7.4pc, Safeguard (PandG) 14.3pc, 12.6pc and Lifebuoy (Unilever) 21.6pc, 24.5pc, respectively. The complainant stated that the Nielsen's data reflects the falsity of the respondent's claim whether taken in value share or volume share. Rather, this position is held by a competitor's brand Lifebuoy'. The difference in the value share and volume share between the two brands reflects the popularity and premium quality of Lifebuoy. Hence, the respondent's claim that Safeguard is No I rated anti-bacterial soap in Pakistan is not substantiated by Neilson's data. Furthermore, the respondent has been marketing Safeguard by distributing false or misleading information to consumers without having a reasonable basis as to the product's character, properties, quality and suitability for use, among other things.

The respondent lacks any substantial proof or reliable scientific healthcare related evidence in support of its claim. The only disclaimer/disclosure made by the respondent in its marketing and advertising campaigns is the above-mentioned study carried out by Nielson. Meanwhile, the CCP has also imposed a penalty of Rs10 million on Colgate-Palmolive Pakistan (Pvt) Ltd for running a deceptive marketing campaign for one of its products, 'Max All Purpose Cleaner' (Max APC), in violation of Section 10 of the Competition Act, 2010. CCP said it received complaints against Colgate-Palmolive Pakistan (Pvt) Ltd and conducted an inquiry into the matter and issued a show-cause notice to Colgate Palmolive on recommendations of the inquiry report. During the hearings, Colgate Palmolive could not substantiate its advertising claims for Max APC.

A bench comprising Chairperson Vadiyya Khalil and Member Ikramul Haque Qureshi passed an order stating that the advertising claims made by Colgate Palmolive were without scientific backing and evidence, and were capable of harming the business interests of Reckitt Benckiser Pakistan and other competing undertakings in the relevant market.

The bench directed the company to suitably modify its claims relating to Max APC and omit any misleading comparisons from its trade letter.

The company was reprimanded not to indulge in deceptive marketing practices in future to avoid stricter penal consequences.
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Publication:Flare
Geographic Code:9PAKI
Date:Aug 31, 2017
Words:1043
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