PSO fined Rs150 million for 'deceptive marketing campaign'
A notice was issued to the state-owned oil company by Competition Commission of Pakistan (CCP).
ISLAMABAD (Dunya News) - The Competition Commission of Pakistan (CCP) has fined the Pakistan State Oil (PSO) Company Ltd Rs150 million for a deceptive marketing practices for some of its products including ‘Premier XL Gasoline’and ‘Green XL Plus Diesel’.
A show-cause notice was issued to the state-owned oil company by a CCP bench comprising Vadiyya Khalil (chairperson) and members Dr Shahzad Ansar and Ikramul Haque Qureshi.
The decision was announced on a complaint filed by Muhammad Inaam Azhar Siddiqi on June 30, 2014.
After the initial probe, the Commission authorized an enquiry under Section 37(2) of the Act and appointed an enquiry committee to further probe into the matter. The committee completed its report, which concluded that prima facie the respondent has been engaged in ‘deceptive marketing practices’ in violation of Section 10 of the Competition Act of 2010.
The complainant alleged that since 2003 - 2004, PSO has been marketing that use of the products both in old and new vehicles results in more mileage and improved performance of vehicle’s engine due to use of various additives. Between 2012 - 2013, it abruptly discontinued the use of such additives, while the name of the products and associated branding/insignias launched alongside the products in 2003 - 2004 remain in place to-date.
The complainant claimed that PSO has been engaged in ‘deceptive marketing practices’ by distributing false and misleading information to consumers and also that distribution of such information is capable of harming the business interests of competing.
The CCP in its verdoct stated that PSO could neither provide any scientific basis for making the claims in the first place nor did it stop making the claims when it stopped mixing the additives in 2012-13.
According to the inquiry, these claims by PSO led consumers to believe that the fuel they were purchasing was superior to others and therefore harmed competition.
The Commission imposed PKR 75 million as penalty for a total of PKR 150 million for each of the two violations of Section 10(1) read with Section 10(2)(a) and 10(2)(b).
The Commission further directed the state-owned oil marketing company to immediately cease the use of ‘Green’ and ‘Premium’ in its branding, including its trademarks on its products and in marketing, advertising, packaging, and carrying material including on its website and its point of sales, and to make appropriate changes its branding within thirty 30 days that remove the impression that the products are premium and environmentally friendly.
