Background of the Case:

The Commission received a formal complaint from Reckitt Benckiser Pakistan Ltd., wherein it was alleged that Proctor & Gamble publicised its product “Safeguard” as “Pakistan’s No. 1 rated Anti-bacterial Soap” in violation of Section 10 of the Competition Act as it lacked reasonable basis to substantiate the claim. While referring to the Commission’s public notice published in leading newspapers warning companies to comply with the provisions of Section 10 of the Competition Act when advertising their products, Reckitt Benckiser alleged that the Proctor & Gamble disregarded the Commission’s warning by running an advertisement campaign for Safeguard, which was not only misleading consumers but also harming the business interests of its competitors.

An inquiry conducted by CCP concluded that the overall net impression of the Safeguard advertisement is that “Safeguard is Pakistan’s No. 1 Antibacterial Soap”, as the word ‘rated’ is written in a significantly smaller font. Moreover, without a clear and conspicuous disclosure, the advertisement campaign for Safeguard as “Pakistan’s No. 1 rated Anti-bacterial Soap” amounted to violation of Section 10 of the Competition Act. On recommendation of the inquiry report, a show cause notice was issued to Proctor & Gamble Pakistan.

Order:

The Commission held that there are six factors which are considered to ascertain whether the adverting claim has a reasonable basis, which are:

a. type of claim;

b. benefit if claim is true;

c. consequences if claim is false;

d. the ease and cost of developing substantiation for the claim;

e. the type of product; and

f. the level of substantiation experts in the field would agree is reasonable.

After hearing the complainant and respondent, the Commission 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. The products should also carry clear and conspicuous disclaimer/disclosure along with the claims, which the consumers could easily notice and understand.

The Commission found Proctor & Gamble’s reliance on studies and surveys to rank itself as Pakistan’s No. 1 rated Antibacterial Soap irrelevant, materially false and misleading, in violation of Section 10 of the Competition Act. In addition to imposing the penalty, the Commission 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 Commission further directed Proctor & Gamble to file a compliance report with the Registrar of the Commission within a period of forty-five (45) days from the date of issuance of this order..

CURRENT STATUS:

P&G filed appeal before CAT challenging the order.