The Competition Commission of Pakistan (‘CCP’) has disposed of the Show Cause Notice issued to M/s Procter & Gamble Pakistan (Private) Limited (‘P&G’) for deceptive marketing practices in terms of Section 10 of the Competition Ordinance, 2009 (the ‘Ordinance’) vide its Order dated February 23, 2010. CCP took suo motto notice of the advertisements of one of the products of P&G i.e. ‘Classic Clean Head & Shoulder Shampoo’ (‘Product’), wherein, it was advertised that, the Product is ‘World’s No. 1 anti-dandruff shampoo’ suggesting that its use renders the hair ‘100?ndruff free’ (hereinafter referred to as the Advertisements). CCP in its Order, issued by Ms. Rahat Kaunain Hassan, Member CCP, has directed P&G “to comply with the following, within a period of two (2) weeks from date of issuance of this Order; a) stop advertising the subject advertisement (which has been modified by P&G) in its current form in all segments of media and in future P&G shall not use the phrase ‘100?ndruff free’ in their advertisement of the Product, unless it is properly substantiated by a cogent evidence providing it a reasonable basis for such claim; and/or, b) modify its claim of ‘100?ndruff free’ to include significant conditions that it ‘removes 100% of visible dandruff flakes’ and ‘the claim is based on the visibility of flakes at two feet distance when used regularly’, in line with what has been approved by ClearCast for broadcast on TV in UK. c) file compliance report with the Commission forthwith after implementing the aforementioned directions.” In the event P&G fails to comply with the above directions within the specified time period and continues with the contravention of Section 10 of the Ordinance, it shall be liable under Section 38 of the Ordinance to pay a penalty amounting to Rs. 25,000,000/- (Rupees Twenty Five Million) million and an additional penalty of Rs. 2,50,000/- (Rupees Two Hundred and Fifty Thousand Only) per day from the date of passing of the Order. With reference to reasonable basis for the claim ‘World’s No. 1 anti-dandruff shampoo’, CCP in its Order has held that, ‘P&G‘s claim of being ‘World’s No. 1 anti-dandruff shampoo’ is reasonably substantiated on the basis of the report by Neilson.’ As per data available in the Neilson Report, even if we assume that the second highest selling shampoo Unilever’s ‘All Clear Anti Dandruff Shampoo’ occupies 100% of the remaining market shares, something which is practically impossible in reality – All Clear Anti Dandruff Shampoo would have a value share of 22.6%, which is still significantly lower than Head and Shoulders value share of 41.7%. With reference to reasonable basis for the claim ‘100?ndruff free’, CCP in its Order has held that, the overall net impression of the advertisement is not that regular use of the Product removes ‘up to 100% of the visible flakes’, the said disclosure appears in the advertisement on the left in very fine print which is not legible or readable to any consumer (be it average, reasonable or ordinary)… the claim from the original advertisement is simple and clear and an ordinary consumer is likely to infer only that, the Product renders the hair 100?ndruff free. As for the basis of the claim, that a fixed distance of two feet was chosen as the distance to observe visible flakes as this simulated a realistic personal distance which people would choose when speaking to each other and that any closer (distance) was likely to be perceived as an invasion of personal space… if this stance is correct the distance shown in the advertisement is much less than two (2) feet. These two aspects i.e., i) dandruff being restricted to visible flakes, and ii) visibility of flakes is adjudged from a distance of two feet, in my considered view are significant and ought to have been communicated/disclosed to the consumer while marketing the Product. It was observed in CCP Order that, ‘dandruff includes five conditions i.e., i) itchiness, ii) scalp tightness, iii) dry feel, iv) irritation, and v) flakes therefore to say that by removing of visible flakes dandruff is removed, would not be correct. Even from the point of view of ‘ordinary consumer’, even if the definition of dandruff is restricted to itchiness and flakes, the claim based on the cited document cannot be construed to have a reasonable basis.’ Therefore, it was held in the Order that, ‘P&G in the advertisement of the Product suggesting that the use of Product renders hair ‘100?ndruff free’ is deceptive and is tantamount to disseminating misleading information in terms of clause (b) of Sub-section (2) of Section 10 of the Ordinance as it lacks reasonable basis regarding the character, suitability of use and/or properties of the Product in question.’ It was also observed in the Order that, ‘P&G attempted to improve upon the initial advertisement, it cannot be overlooked that for P&G it was not the first time that the said claim of ‘100?ndruff free’ was challenged as being misleading on the basis of lacking reasonable basis - albeit in other jurisdictions. Also, an undertaking of P&G stature, which maintains that it exists in 83 countries and has been in business since 1837, and further claims that “the products of P&G touched 3 billion times everyday to the lives of people” needed to exhibit a higher degree of caution and a better sense of responsibility towards consumers.’
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