Background of the case:

The Commission received a formal complaint from M/s Square Distribution & Marketing System (Pvt) Limited (collectively the “Complainants”) alleging that M/s Reckitt Benckiser Pakistan Limited (the “Respondent”) has been disseminating misleading information to the consumers by creating an impression of its product ‘Strepsils’ as a drug for sore throat and cough. It was further alleged that Strepsils was de-registered as drug when acquired by Reckitt from Boots in 2005, and then re-launched with the disclaimer, “Non-medicated Lozenges.” However, the company made no effort to educate and inform the consumers regarding the discontinuation of medicinal ingredient in it.

The Commission constituted an enquiry to probe into the matter, the enquiry report concluded that the marketing campaign of the respondent appears to be deceptive in terms of Section 10 of the Act in general, read with sub-section 10(2) (b) of the Act which prohibits distribution of false and misleading information to consumers. Moreover, marketing campaign of the Respondent demonstrates that the public was actually deceived into perceiving that ‘Strepsils’ was still a medicated sore throat remedy. The Respondent’s misleading campaign was also capable of harming the business interests of other undertakings in, prima facie, violation of Section 10(1) in general, and in particular, Section 10(2)(a) of the Act.

Issues:

I) Whether the complaint is maintainable?

II) Whether the alleged claims are false or misleading within the meanings of Section 10(2)(b) of the Act?

III) Whether the alleged claims are capable of harming business interest of the Complainant or other businesses within the meanings of Section 10 (2) (a) of the Act?

Foreign Judgments:

a) Hoffman-La Roche [1978] E.C.R 1139

b) Philips Electronics NV v Remington Consumer Products Ltd [2002] ECR 1-000

Order:

The Commission in its order noted that branding has a significant role in marketing the of products, and therefore, the change in formula of the Product has changed its character from being categorized as a medicine to a non-medicated product. Keeping in view, the history of the brand ‘Strepsils’ and also the fact that, internationally, it is known and marketed in various jurisdictions as a medicinal product, the disclosure of such facts is important for its marketing in Pakistan.

The bench found itself in agreement with the finding of the Enquiry to the extent that the marketing campaign was capable of misleading consumers and capable of being harmful to the businesses. It also observed that the disclaimer on the box of the Product was in-adequate. The bench in its order held that the Respondent has not been able to substantiate neither before the Enquiry Committee nor this Bench as to how and to what extent efforts have been made to inform the general public about change in the formula of its product ‘Strepsils’. Barely printing ‘Non-Medicated Lozenges’ on the product box and that too in a very small font does not discharge the onus of making due and sufficient disclosures of such material change in the character of the Product.

Keeping in view the foregoing a total penalty of PKR 150 Million was imposed on Reckitt Benckiser Pakistan Limited (Respondent) for violation of Section 10 of the Competition Act, 2010 for making advertising/marketing claims about its product ‘Strepsils’, which have been found capable of misleading and deceiving under the Act.