Deceptive marketing: CCP smudges Jotun Pakistan’s palette

Imposes Rs1m penalty for ‘baseless’ number one claim.

ISLAMABAD: The Competition Commission of Pakistan (CCP) has said that Jotun Pakistan Private Limited was not a top paint-manufacturing company, as the anti-trust watchdog imposed a penalty of Rs1 million for deceptive marketing practices in violation of the Competition Act of Pakistan.

The CCP found that Jotun Pakistan’s claim of being the number one paint company was false and it passed an order, directing the management to withdraw the disputed advertisement besides depositing a fine of Rs1 million.

The order was passed by a bench comprising Mueen Batlay, Dr Shahzad Ansar, and Ikramul Haque Qureshi and all the members of the CCP. The CCP bench took the decision on the basis of an inquiry report conducted by its team. The team found that the claim ‘number one paint’ publicised by Jotun in its marketing campaign was prima facie in violation of Section 10 of the Competition Act, 2010.

The anti-trust watchdog had initiated an inquiry after receiving complaints from Akzo Nobel Pakistan Limited and Diamond Paint Industries Private Limited alleging that Jotun was running a deceptive marketing campaign for its paint products in which it claimed to be the front-runner without having reasonable basis.

Azko Nobel alleged that Jotun, while marketing its product through print media and billboards, claimed to be the best brand in Pakistan, disseminating misleading and false information to consumers. According to them, Jotun did not provide the basis, character, properties or the quality of its product, which identifies a product being ‘superior’.

Akzo Noble claimed that the false advertisement was capable of harming its business interests.

During the inquiry, the Jotun did not provide any recognisable substantiation for making the claim, according to an official handout issued by the CCP. It added that the only contention made by the Jotun of being number one was true for a Middle-Eastern country. However, the company did not disclose this in its marketing campaign.

The CCP observed that this contention, on its own, was untenable as the company was dealing with the market in Pakistan. This additional information has not been made available to the consumers, it added.  Further, Jotun also did not provide any survey results or data to support its claim.

“Importantly, Jotun has not denied the findings of the inquiry report that the claim was prima facie deceptive in nature”, said the CCP. Jotun Pakistan committed before the inquiry officers to remove and replace all the marketing materials bearing the claim.

In view of the commitment and compliance undertaken by Jotun during the proceedings, the CCP imposed a penalty of Rs1 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.

Published in The Express Tribune, March  19^th,  2015.

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