CAT upholds ad ruling, slashes penalty for paint firm

KARACHI: The Competition Appellate Tribunal (CAT) has upheld a ruling by the country’s antitrust watchdog against a local paint manufacturer for deceptive advertising practices, while reducing the financial penalty by half.

The tribunal maintained that the company had violated Section 10 of the Competition Act, 2010, by failing to disclose key information in its television commercials regarding promotional tokens included in paint buckets. The initial fine of Rs5 million was lowered to Rs2.5 million, taking into account the company’s admission of wrongdoing and its compliance-focused approach.

The order follows an investigation prompted by a competitor’s complaint, which alleged that the company’s advertisements did not clearly state the presence or redeemable value of tokens offered with certain products. The Competition Commission of Pakistan (CCP) found that, although the company provided disclaimers on packaging and printed materials, its TV commercials -- often the first consumer touchpoint -- omitted critical details.

The commission ruled that such omissions misled consumers and breached advertising standards by depriving buyers of the ability to make fully informed decisions. The use of promotional tokens without clear disclosure in mass media, it said, lacked a reasonable basis under Section 10(2)(b) of the Act. The CCP stressed that transparency in advertising is essential, particularly when promotional schemes like coupons or tokens can significantly influence purchasing decisions.