CCP fines 3M Pakistan Rs10 million over Scotch-Brite ad

The Competition Commission of Pakistan has fined 3M Pakistan (Private) Limited Rs10 million for deceptive marketing of its Scotch-Brite product, following a complaint by Colgate-Palmolive Pakistan Limited. In a statement on Tuesday, the CCP said 3M had made a false or misleading comparison between Scotch-Brite and Colgate-Palmolive's Max Scrub in violation of Section 10 of the Competition Act, 2010.

The case began when Colgate-Palmolive alleged that a Scotch-Brite marketing video showed both products being washed for 20 minutes, after which Max Scrub appeared significantly deteriorated while Scotch-Brite remained in better condition. After an enquiry, the CCP issued a show cause notice to 3M. The company challenged the authenticity and reliability of the video, saying an employee carried out the demonstration in his personal capacity without company approval.

The commission, however, found that Muhammad Imran, then regional sales manager of 3M Pakistan, had acknowledged making the comparison. Because the demonstration was tied to his official duties and formed part of a marketing campaign commissioned by 3M, the CCP held the company responsible for his conduct. The order states that comparisons of competing products made without a reasonable basis or recognisable substantiation may amount to false or misleading advertising.

The CCP found 3M had failed to substantiate the comparison. It also considered a third-party laboratory report submitted by Colgate-Palmolive, which concluded after testing that the two products were of similar quality; 3M did not rebut that report during proceedings. The commission rejected 3M's argument that the demonstration was not advertising because it was shown to third-party channel partners instead of consumers, noting that those partners were engaged to promote Scotch-Brite, improve its market visibility and increase sales.

As a result, the CCP imposed a Rs10 million penalty under Section 10(1) read with Section 10(2)(c) for false or misleading comparison of goods in advertising. 3M has also been directed not to repeat the same or similar conduct concerning Max Scrub or another undertaking's comparable product and to submit a compliance report on payment within 60 days. Failure to comply will attract an additional penalty of Rs50,000 per day from the date of the order, the statement added.