Nissan Taiwan

Case:

Taipei High Administrative Court overruled the administrative litigation filed by Nissan Taiwan over the FTC's decision

Key Word(s):

Automaker, false advertising, administrative fine

Reference:

Taipei High Administrative Court Judgment(2013) Su Tzu No.387

Industry:

Manufacture of Motor Vehicles (3010)

Relevant Law(s):

Article 21 of the Fair Trade Law

Summary:

1. The Fair Trade Commission (hereinafter referred to as the FTC) received complaints that the advertisements posted by Nissan Taiwan (the plaintiff) and its Kaohsiung-Pingtung region distributor Yu Chang Motor Co., Ltd. for the "Rogue" SUV indicated that the vehicle was equipped with 6 supplemental restraint systems (SRS) but failed to disclose the operating restrictions regarding the airbag for the front seat passenger. After investigation, the FTC concluded that the conduct was a misleading representation with regard to content of product in violation of Article 21(1) of the Fair Trade Law and sanctioned Nissan Taiwan in accordance with the first section of Article 41(1) of the same law. Nissan Taiwan found the Executive Yuan's Petition Decision Yuan Tai Su Tzu No. 1020121306 dated January 10, 2013 unacceptable and filed an administrative litigation. The Taipei High Administrative Court announced its Judgment(2013) Su Tzu No. 387 that "the appeal is overruled and the plaintiff is responsible for the litigation expenses."
2. As set forth in Article 21(1) of the Fair Trade Law, "No enterprise shall make or use false or misleading representations or symbol as to price, quantity, quality, content, production process, production date, valid period, method of use, purpose of use, place of origin, manufacturer, place of manufacturing, processor, or place of processing on goods or in advertisements, or in any other way making known to the public." The term "false" means the representation or symbol is inconsistent with the fact and the general public or concerned parties find the difference difficult to accept and wrong perceptions or decisions can result from such difference. The term "misleading" means whether the representation or symbol is consistent with the fact, it is likely to cause the general public or concerned parties to have wrong perceptions or make wrong decisions. Meanwhile, it is also specified in the first section of Article 41(1) that "the Fair Trade Commission may order any enterprise that violates any of the provisions of this Law to cease therefrom, rectify its conduct or take necessary corrective action within the time prescribed in the order; in addition, it may impose upon such an enterprise an administrative fine of not less than fifty thousand nor more than twenty-five million New Taiwan Dollars."

3. Passive safety equipment in automobiles is closely related to car safety and therefore an important factor to consider when consumers making decision of purchase. As the enterprise in question did not disclose the operating restrictions of the passive safety equipment in the automobile, consumers would only take for granted that the 6 SRS airbags would all function normally and effectively. This was very different from the fact that some of the airbags could shutdown automatically from the beginning and would not provide protection when a dangerous collision occurred. The FTC's original decision to impose the administrative fine of NT$750,000 had been reached after taking into account the factors listed in Article 36 of the Enforcement Rules of Fair Trade Law. Therefore, the FTC, the defendant in this case, had considered all the factors to be considered and exercised its discretionary power within the statutory range of discretion. There was neither violation of the principle of proportionality nor abuse of discretionary power by the FTC.
4. With all the above factors considered, all the statements presented by Nissan Taiwan in its appeal were apparently invalid. The FTC's conclusion that the company's failure to disclose in the advertisements the operating restrictions of the airbag in front of the front seat passenger side was a misleading representation with regard to content of product in violation of Article 21(1) and the FTC's decision made according to the first section of Article 41(1) to order Nissan Taiwan to immediately cease its unlawful act after receiving the disposition and also impose on it an administrative fine of NT$750,000 were by all means in compliance with related regulations. The Taipei High Administrative Court affirmed the decision made by the FTC and therefore overruled the appeal.

Appendix:
Nissan Taiwan's Uniform Invoice Number: 80032530

Summarized by Lai, Chia-Ching; Supervised by Ren, Han-Ying