CAT upholds CCP fine on diamond paints for misleading ads

May 15, 2025 (MLN): The Competition Appellate Tribunal (CAT) has upheld the decision of the Competition Commission of Pakistan (CCP) to penalize Diamond Paints for deceptive marketing practices in violation of Section 10 of the Competition Act, 2010.

However, the original fine of Rs5 million has been reduced to Rs2.5m, considering the company’s compliance-oriented conduct.

The tribunal’s ruling comes after Diamond Paints admitted guilt and requested leniency, as per the press release issued today.

Recognizing the company’s readiness to comply with regulatory requirements, the CAT reduced the penalty and concluded the appeal.

The CCP’s initial order was delivered by a bench comprising Chairman Dr. Kabir Ahmed Sidhu and Member Mr. Salman Amin.

The case originated from a complaint lodged by Nippon Paint Pakistan (Pvt.) Ltd, which alleged that Diamond Paints did not disclose key information in its television commercials (TVCs), specifically regarding the presence and value of redeemable tokens in its paint buckets.

Following an investigation, the CCP found that while disclaimers were included on product packaging and shade cards, the TVCs often consumers’ first point of contact  failed to mention this critical information.

The Commission determined that such selective omission misleads consumers and infringes upon their right to informed decision-making.

The CCP’s order stated that promoting redeemable tokens without disclosing their value in advertisements lacks a reasonable basis under Section 10(2)(b) of the Act.

The Commission emphasized that clarity in advertising is crucial, especially when promotional offers like coupons or tokens can significantly impact consumer choices.

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