ISLAMABAD: The Competition Commission of Pakistan (CCP) has decided to initiate proceedings against a paint company, which claimed that its paint products are providing protection from Covid-19.
In this regard, the CCP has issued an inquiry report against the paint company.
In light of the discussions, it is evident that the false and misleading advertisement would give the company a competitive edge over other undertakings and would ultimately result in higher sales. Furthermore, the false and misleading advertisement made by the company has the ability to influence consumers’ decision making process, while choosing between different alternatives at the time of purchase. This deviation in decision making based on a false and misleading advertisement is, hence, also capable of harming the business interests of other undertakings, the CCP order added.
While evaluating the marketing material referred, the company is giving an overall general impression that using their paint products provides protection from coronavirus. The company, in order to attract consumers, has made certain claims without any proper exercise of testing its products from an independent third party lab. Such claims cannot be made or allowed in the absence of any documentary evidence in support of their claims.
It is reiterated that the company has been given multiple opportunities to share any unbiased principle document from which they could establish the efficacy of their paint products against coronavirus. But the company failed to supply any such information, the CCP report said.
Furthermore, the Enquiry Committee opined after the perusal of the documents, particularly submitted by the company (respondent) that BKC is used as a disinfecting base in hand sanitizers and disinfectants. There has been no testing or product development to assess the efficacy of this compound in paint products or as a long term self-cleaning product.
The American Society of Microbiology recommends BKC as a disinfectant base having virucidal effect, as stated by the respondent is misleading because such evaluations have been performed on disinfectants (such as Lysol) or hand sanitizers. The function of BKC hand sanitizers, antimicrobial soaps and disinfectants are entirely different from its use in paint products. Having stated that the role of BKC is not fully rejected, but only its effectiveness, usage and safety when used in or with paint products. Moreover, the Respondent has not precisely mentioned the effective role of BKC in paint products. Illustrations stated are of hand soaps, health care hand washes, surgical scrubs, disinfectants and laundry. In addition, the primary focus of this appendix is the antibacterial properties of BKC, without mentioning its effectiveness against coronaviruses. Furthermore, according to the said article, BKC are known to cause skin irritation, eye irritation, allergic contact dermatitis and oral inhalation toxicity.
Moreover, the American Society for Microbiology proposed restrictions for the use of BKC in consumer products. In the end, it is stated in the article that there is a need for further research on the effect of BKC exposure, as part of consumer products to elucidate its toxigenic and long term potential to alter microbial flora in both clinical and environmental context, and limiting the use and regulating and monitoring chemicals such as BKC’s are important to reduce negative impacts on humans and environment.
It is also relevant to mention here that according to a recent study on the Assessment of respiratory and systemic toxicity of Benzalkonlum chloride, it has been observed that “BAC has been increasingly used as a component in humidifier disinfectants in Korea. raising a serious health concern. Moreover, it poses significant health hazards to workers handling the chemical because of direct exposure.
Thus, in light of the above, it can be concluded that the company is apparently involved in the distribution of false and misleading information to the consumers that lacks a reasonable basis related to character, properties and suitability for use, prima facie, in violation of Section 10 (1) of the Act in general and 10(2)(b) in particular.
The products, while claiming to be virus protective, do not provide details or any guidelines/instructions that may elaborate about the said protection.
In the absence of any documentary proof, such vital information falls in the category of non-disclosure of ‘material’ information, which prima facie violates provisions of Section 10(2)(b) of the Act.
It is established that releasing an advertisement, on the basis of distribution of false and misleading information that is capable of harming the business interests of other Undertakings; and distribution of false and misleading information to the consumers that is lacking a reasonable basis, related to price, characteristics, properties attracts the provisions of Section 10(1) of the Act in general and Section 10(2)(a) and 10(2)(b) of the Act in particular.
As regards the effect of anti-competitive behavior spilling over territorial limits of other provinces is concerned, it is highlighted that the Respondent advertised through social media platform i.e. Facebook. Hence the scope of the advertisement was not restricted to a particular area or province. In fact, the product is available to the users around the country. The advertisement had a nationwide effect because the customers can access the Facebook from any province.
In view of the above, it can be established that the effect of anticompetitive behavior is spilling over the territorial limits of provinces.
It is concluded that the company could not back its claims through independent third party lab test reports and is likely to be involved in the distribution of false and misleading information to consumers, including the distribution of information lacking a reasonable basis related to price, characteristics, properties in, prima facie, violation of the Competition Act.
Besides, the behavior of the company is also capable of harming the business interest of other Undertakings, which apparently amounts to violation of Section 10(1) in general and in particular Section 10 (2Xa) of the Act.
The, prima facie, violations discussed in terms of the findings of the Enquiry Report warrant initiation of proceedings against M/s Nelson Paint Industries (Private) Limited under Section 30 of the Act, the CCP added.
Copyright Business Recorder, 2022
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