Diamond Paint faces Rs 5 million Penalty for Deceptive Advertising

The Competition Commission of Pakistan (CCP) has imposed a Rs 5 million fine on M/s Diamond Paint Industries (Pvt) Ltd. for violating Section 10 of the Competition Act, 2010, which prohibits deceptive marketing practices. This decision was made after a complaint by Nippon Paint Pakistan (Pvt) Ltd regarding the marketing of Diamond Paint’s ‘Durasilk’ product on television.

A CCP bench, led by Chairman Dr. Kabir Ahmed Sidhu and Member. Salman Amin, found that Diamond Paint’s television commercials for ‘Durasilk’ failed to disclose essential details, particularly the presence and value of redeemable tokens in paint buckets. While disclaimers were included on packaging and shade cards, these crucial details were omitted from the TV commercials, which CCP deemed to exploit consumer rights by providing incomplete information.

This was the third instance where the omission of material information in TV ads by paint manufacturers raised concerns. The CCP emphasized the importance of transparency in advertising, as television ads often serve as the first point of contact between consumers and products. The CCP’s Paint Order 2012 mandates that any use of redeemable tokens must be fully disclosed, and Diamond Paint’s failure to do so was found to lack a reasonable basis in relation to pricing, violating Section 10(2)(b) of the Act.

The CCP highlighted that proper disclosure in marketing techniques is critical, especially when redeemable coupons are involved, as they significantly influence consumer decisions. Diamond Paint’s failure to provide consumers with all necessary information was deemed a violation of the CCP’s earlier directives on redeemable tokens and Section 10 of the Competition Act.