Islamabad, August 16, 2024 – In a significant move to protect consumer rights, the Competition Commission of Pakistan (CCP) has levied a Rs 5 million penalty on M/s Diamond Paint Industries (Pvt) Ltd.
The penalty was imposed for violating Section 10 of the Competition Act, 2010, which prohibits deceptive marketing practices. This action underscores the CCP’s commitment to ensuring transparency in advertising and holding companies accountable for misleading consumers.
The decision came after a complaint was filed by Nippon Paint Pakistan (Pvt) Ltd. against Diamond Paint’s marketing campaign for its product ‘Durasilk,’ which was aired on various television channels. A CCP bench, led by Chairman Dr. Kabir Ahmed Sidhu and Member Salman Amin, investigated the complaint and found that the advertisements were in breach of the Competition Act.
This marks the third time that concerns have been raised about the omission of critical information in television commercials by paint manufacturers. The investigation revealed that, although Diamond Paints included disclaimers on its packaging and shade cards, it failed to disclose the presence and value of redeemable tokens in its paint buckets during its television commercials. This omission was deemed to be an exploitation of consumer rights, as it prevented consumers from making fully informed purchasing decisions.
Television commercials often serve as the initial point of contact between consumers and products. Therefore, transparency in advertising is essential for enabling informed consumer choices. The CCP’s Paint Order 2012 explicitly requires that any inclusion of a redeemable token in a product must be disclosed properly in advertising. Failure to do so is considered a violation of Section 10(2)(b) of the Competition Act.
In addition to the penalty, the CCP has conducted a comprehensive study of the entire paint industry to assess compliance with its 2012 order. The findings highlighted the importance of proper disclosure of redeemable tokens in marketing campaigns. Such tokens can significantly influence consumer purchasing decisions, and non-disclosure can lead to consumer deception.
The CCP bench emphasized that Diamond Paints’ failure to provide full information about the redeemable tokens in its advertisements was a clear violation of the earlier directives. This lack of transparency deprived consumers of the ability to make informed decisions and contravened Section 10 of the CCP Act.
The imposition of this penalty serves as a stern warning to other companies in the industry. The CCP remains vigilant in its efforts to ensure that all advertising practices are fair, transparent, and in compliance with the law. Companies are urged to adhere strictly to advertising regulations to avoid similar penalties and to maintain consumer trust.
This ruling also reinforces the CCP’s role as a watchdog in the marketplace, ensuring that consumers are protected from deceptive practices and that companies operate within the bounds of the law. The penalty against Diamond Paints is a reminder that any attempts to mislead consumers will be met with swift and decisive action.