Diamond Paints to Pay Rs. 2.5 Million Fine for Deceptive Advertising

The Competition Appellate Tribunal (CAT) has upheld the Competition Commission of Pakistan’s (CCP) decision to penalize Diamond Paints for deceptive marketing, a violation of Section 10 of the Competition Act, 2010. The original penalty of Rs. 5 million was halved to Rs. 2.5 million, in light of the company’s compliance-oriented approach. The tribunal’s decision follows Diamond Paints’ admission of guilt and a plea for leniency. Appreciating the company’s willingness to comply with legal obligations, the CAT reduced the fine and disposed of the appeal. The CCP’s original order was issued by a bench comprising Chairman Dr. Kabir Ahmed Sidhu and Member Salman Amin. It stemmed from a complaint filed by Nippon Paint Pakistan (Pvt.) Ltd, alleging that Diamond Paints failed to disclose key details in its television commercials (TVCs), specifically the presence and value of redeemable tokens in its paint buckets. CCP’s investigation found that while the company included disclaimers on packaging and shade cards, its TVCs — the first point of contact for many consumers — omitted this material information. The Commission concluded that such selective disclosure misleads consumers and violates their right to make informed choices. The order clarified that offering redeemable tokens without clearly stating their value in advertisements lacks 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.