Fair Trade Commission Guidelines on Handling Cases Governed by Article 21 of the Fair Trade Law

Passed by the 151st Commissioners' Meeting on August 31, 1994
Amended by the 269th Commissioners' Meeting on December 24, 1996
Points 22(4) and 23(4), 23(5), 23(7) amended, Points 22(27), 22(28), 22(29), 22(30) and 23(11), 23(12), 23(13), 23(14) added, and Point 26 deleted by the 311th Commissioners' Meeting on October 15, 1997
Point 16(9) amended to 16(8) and Point 6(3) deleted by the 387th Commissioners' Meeting on April 6, 1999
Points 16(6) and 21(7) amended by the 417th Commissioners' Meeting on November 3, 1999
Amended by the 568th Commissioners' Meeting on September 26, 2002
Promulgated by Order (91) Kung San Tzu No. 0910010812 on November 5, 2002
Amended by the 688th Commissioners' Meeting on January 13, 2005
Promulgated by Order (94) Kung Fa Tzu No. 0940001278 on February 24, 2005
Promulgated by Order (94) Kung Fa Tzu No. 0940006949 on August 26, 2005
Amended by the 836th Commissioners' Meeting on November 15, 2007
Promulgated by Order Kung San Tzu No. 0960010188 on November 30, 2007

Chapter 1 General Provisions

  1. The Fair Trade Commission (hereinafter, the "Commission") has adopted these Case Handling Principles for purposes of ensuring fair competition among enterprises, protecting the rights and interests of consumers, effectively enforcing Article 21 of the Fair Trade Law (hereinafter, the "Law"), and prohibiting enterprises from making or using false or misleading representations or symbols on goods (or in connection with services), or in advertisements, or by any other means of making known to the public.
  2. The term "goods" (or services) in Article 21 of the Law refers to subject matters of trade having economic value and other trade-related matters that are not directly related to subject matters of trade but that have the effect of solicitation, including an enterprise's identity, qualifications, business condition, relationship to other enterprises, non-profit (philanthropic) organizations, or government agencies, gifts or prizes attached to such trade by the enterprise, and so forth.
  3. The term "other means of making known to the public" in Article 21 of the Law refers to any act of transmitting information that may directly or indirectly cause the non-specific general or relevant public to collectively see or hear of it.
    Examples of "other means of making known to the public" include [inter alia] all of the following: billboards, business cards, goods or services seminars/presentations, provision of information by an enterprise for publication by the media in the form of reportage, enabling a substantial number of enterprises to collectively see or hear of information by means of mailings, publishing information in publicly sold books, delivering publicity materials to consumers by way of promotion or introduction, and distributing product manuals to professionals for further dissemination of information to the public.
  4. "Representation or symbol" in Article 21 of the Law means an act sufficient to express or transmit information or ideas having commercial value by means of written or spoken language, sound, graphics, marks, numbers, images, colors, shapes, actions, objects, or other means.
  5. "False" in Article 21 of the Law means a representation or symbol that is inconsistent with facts, where the discrepancy would be unacceptable to a considerable number of the general or relevant public, and sufficient to cause misunderstanding or erroneous decisions.
  6. "Misleading" in Article 21 of the Law means a representation or symbol, whether or not consistent with facts, that is sufficient to cause misunderstanding or erroneous decisions by a considerable number of the general or relevant public.
  7. The principles for determining whether a representation or symbol is false or misleading are as follows:
    1. Determination of whether a representation or symbol is false or misleading shall be based on the basis of the general public exercising an ordinary degree of care.
    2. Where a representation or symbol, observed in isolation, is found to be true, but the overall impression and effect it gives, when observed in whole, is sufficient to cause misunderstanding or erroneous decisions by a considerable number of relevant trading counterparts, it shall be deemed misleading.
    3. Where the content of a representation or symbol is manifested by contrast/comparison or especially distinctive means, and where the major part that is especially distinctive could easily form the major factor contributing to a consumer's decision whether to transact, the especially distinctive major part may be observed independently in determining whether the content is false or misleading.
    4. A representation or symbol objectively having multiple reasonable interpretations shall not be deemed false as long as one of the meanings is true; however, this shall not apply when the intent to mislead is evident.
  8. The following factors shall be considered when applying the principles stated in Article 7:
    1. The degree of discrepancy between the representation or symbol and actual conditions.
    2. Whether the content of the representation or symbol is sufficient to affect reasonable judgment making and trading decisions of members of relevant trading counterparts possessing ordinary knowledge and experience.
    3. Effect on the economic interests of competing enterprises and trading counterparts.
  9. Whether an advertisement is false or misleading shall be judged on the basis of the objective circumstances at the time of use of the advertisement by the advertiser.
    Where an advertiser of an advertisement knew or was capable of knowing at the time it used an advertisement that it would subsequently not be able to deliver content consistent with the advertisement, the advertisement is false or misleading.
    "Objective circumstances" in paragraph 1 refers to the advertiser's ability to subsequently deliver, the prevailing laws and regulations, the supply of a product (or service)…and so forth.

Chapter 2 Procedures for Case Handling

  1. When the Commission receives a complaint alleging a false or misleading representation or symbol of another enterprise, the complainant shall be requested to describe the specific details and to provide his or her full name and address in writing. Where an oral complaint is made, the Commission shall make a written record of the complaint and, after reciting it to or having it read by the complainant to verify the accuracy of the content, shall annotate the year, month, and day, and then have the complainant sign or chop it.
  2. When the Commission receives a complaint alleging employment of a false or misleading representation or symbol of another enterprise, basing on the necessity of investigation of facts and evidence, the complainant shall be required to provide relevant evidence and materials such as goods, packaging, and advertisements. The complainant shall also explain in what way the representation or symbol made by the other enterprise is sufficient to cause a relevant trading counterpart' reasonable suspicion that it is false or misleading and the caused damages. A person authorizing another to file a complaint shall execute a power of attorney.
  3. After receiving a written complaint or an e-mail, the responsible department, in addition to following the procedures set forth in the Commission's Government Document Handling Manual, shall carry out an initial formality review of the complaint, addressing the following matters:
    1. Whether it complies with Article 11 or 12 hereof, if the complaint, or any one of the documents transferred from other organization, does not have the concrete contents, complainant's name and address, the complaint will not be taken.
    2. Whether the documents received are indeed complaints in nature shall be determined in pursuance with the intent of the filing parties. If the document received is of something in nature other than a complaint, such as an inquiry concerning the truthfulness of an advertisement, a conjecture that an advertisement contains a falsehood, or a request for an appraisal by the Commission, the responsible department shall reply via letter that the case does not fall within the Commission's official purview, and shall directly refer the matter for handling by the relevant competent authority for reference and handling.
    3. If the complainant suffered injury or disadvantage by the alleged representation or symbol If the complainant is not the competitor or trading counterpart of the alleged one, the Commission shall require the complainant to submit another written complaint with concrete evidence of injury or disadvantage.
      The handling and reply for the complaint that do not meet the format mentioned before, the head of the supervisory Department is authorized make the final decision, then report monthly to the Commissioners' meeting for confirmation.
      The provisions of paragraph 1 shall not be applied where important public interest involves in the complaint, and the Commission shall initiate an ex-officio investigation.
  4. Where the initial review of a complaint conducted by the supervisory Department concludes that the alleged facts and reasons obviously do not meet the criteria of Fair Trade Law, or involve in the complainant's individual injury or disadvantage only, thus slightly influencing trading order or public interests. Therefore, the undertaking Department shall reply to the complainant with approval, and report to the Commissioners' Meeting on a monthly basis for affirmation.
    Where the initial review of a complaint conducted by the supervisory Department concludes that the alleged facts involve in criminal offenses, or does not involve in trading order, public interest, or civil matters, or the alleged business has already been closed down, dissolved, or moved to an unknown location, such that the investigation is unable to proceed. Thus, the procedure set forth in the preceding paragraph may be applied.
  5. Under any of the following circumstances during a case investigation, the unit responsible for the complaint may cease the investigation and, signing and attaching its opinion, forward the case for review by the Commissioner in charge. With the Chairperson's approval, the case shall either be filed for reference, or closed by written response letter, and compiled with other like matters for monthly presentation to the Commissioners' Meeting:
    1. If the language employed by an enterprise in a representation or supervisory symbol is ambiguous or vague (falls into a gray area as to its legality), and no interpretive or prohibitive provisions have been set forth by other competent authorities or in other applicable laws or regulations, and the general consumer public has not yet formed a widespread consensus concerning its content, for example as in cases involving commonly used non-statutory language or where there is a lack of specific criteria on which to base judgment, the undertaking Department shall reply by letter that the alleged facts should not be condemned.
    2. The products, sold under the representation or symbol, continue to be sold, but the respondent had already ceased or corrected the representation or symbol before the complaint was filed.
    3. The respondent had already suspended or ceased business or been dissolved before the complaint was filed or, during the investigation, has suspended or ceased business, been dissolved, or moved to an unknown location such that the investigation is unable to proceed.
    4. The fact of complaint made by a complainant has been contained in the decision made by the Commissioners' Meeting.
    5. A same complainant has filed and withdrawn a complaint, and then subsequently without legitimate reason filed another complaint against the enterprise with respect to the same representation or symbol.
    6. The complaint is a civil matter that does not involve trading order or the public interest.
    7. The complaint involves a criminal case.
    8. The case influence trading order and public interests slightly, and both parties have been reconciled.
    9. The complainant has been requested by letter to make a supplementary report because of incomplete formality of the complaint, but fails do it in time.
  6. The division of power between the Commission and other competent authorities is described as follow:
    1. Special laws take precedence over general laws.
    2. Strict laws take precedence over lenient laws.
      According to the preceding paragraph, the case types, wshich should refer to other competent authorities, are described in Attachment A.
  7. The following principles shall be considered when determining "effect on trading order or public interest":
    1. Numbers of victims.
    2. Whether such a practice is a prevalent phenomenon in the given industry.
    3. Reprehensibility in terms of commercial ethics.
    4. Degree of impairment to effective competition.
  8. Concerning the examples that representation or symbol is "false or misleading", please refer to Attachment B.
    Chapter 3 Simplified Operation Procedures for Case Handling
  9. Unlawful advertisement cases which influence trading order or public interests slightly, and conform to one of following criteria, shall apply to simplified operation procedures:
    1. The stated facts are simple (or the details of a case are simple).
    2. Precedent decisions have been set forth, and the alleged facts
      violate the case type described in the Commission'Policy Statements or Guidelines, or belongs to the unlawful behavior style set forth in Article 17.

    The case which is not unlawful, or with unlawful supposition but influences trading order and public interests slightly, may be handled by the simple operation procedures under one of the following circumstances:
    1. The case, which has simple details but there is unlawful supposition may be urged to pay attention to or improved by administrative direction.
    2. The case after investigation involves only complainant's individual injury or disadvantage, with slightly unlawful details of the case.
    3. The case, which is corresponding to the matter, ceased from investigation set forth in these Principles.
      The "fact stated is simple", "the details of a case are simple" mentioned in foregoing two paragraphs refer to the case that evidently the representation or symbol is not inconsistent with to the fact.
  10. The disposition by simplified operation procedures may be directly made a draft simplified disposition, response letter forwarding to be reviewed by commissioners, vice chairperson, and chairperson for review. After approval or approval after amendment of reviewed opinions, the disposition will be issued first and then submitted to the Commission's Meeting next week for further affirmation.
    During the review process, if there is different opinions that need to be approved by the Commission first shall be presented to the Commission's Meeting for further discussion.
  11. The contents set forth in the simplified (formative) disposition are as follows:
    1. The letters of " The Fair Trade Commission, Executive Yuan" and disposition No.
    2. Names and addresses of the condemned, his/her representative (person-in-charge) or agent.
    3. Text.
    4. Fact. Using succinct terms by listing type simply describe the unlawful facts considered by the Commission.
    5. Reason. Succinctly explains the reason of the important conditions for the fact to be affirmed. If the defendant applies for investigation or the rendered fact or evidence is not approved or adoption, shall enter its reason paragraph by paragraph.
    6. Evidence. Enter the related evidences obtained from investigation, such as complaint letter, name of the advertisement, the defendant's opinion, the defendant's rendered information, the information obtained from investigating the dependant's office, other information from the Commission's investigation (such as photos, statistic information, real commodities, and response letter to the Commission's inquiry of related organization and group), the information from other organization, group (such as judgment, indictment, appraisal opinions) .
    7. Applicable laws. Paragraphs 1, 2 and 3 of Article 21, and Article 41 of Fair Trade Law.
    8. Notes. The instructions for appeals and other matters should be entered orderly.
  12. The simplified and uncondensed case shall be submitted and to be reviewed by commissioners, vice-chairperson, and chairperson. After approval or amendment of reviewed opinions, the decision letter will be issued first and then submitted a report to the Commission's Meeting next week for further affirmation.
    During the review process, if there is different opinions that need to be approved by the Commission first shall be presented to the Commission's Meeting for further discussion.
  13. If there is one of following conditions of a case, the case shall not be applied to the provisions of this chapter:
    1. The situation that applied for the later section of Article 41 of Fair Trade Law.
    2. The fine amount exceeds NT$400,000.