The advertisement “Challenging Venus Ultrasonic Fat Removing Massager” by Yu-Hsin Biotechnology Co. Ltd and Eastern Home Shopping Company broadcasted on the cable television channel was exaggerated and false, in violation of the Fair Trade Law

Chinese Taipei

Case:

Key Words:

advertiser, false advertisement, testing report, ultrasonic fat removing massager, medical theory, clinical testing

Reference:

Fair Trade Commission Decision of January 27, 2005 (the 690th Commissioners' Meeting); Disposition Kung Ch’u Tzu No. 094010

Industry:

Electronic Shopping and Mail-Order Houses (4811)

Relevant Laws:

Article 21 of the Fair Trade Law

Summary:

The Department of Health, Executive Yuan wrote a letter to notify this Commission that Taipei City’s Wanhua District Health Center discovered Yu-Hsin Biotechnology Co. Ltd. (hereinafter referred to as “Yu-Hsin Company”) aired an advertisement of “Challenging Venus Ultrasonic Fat Removing Massager” on Lien Wei Cable Television Company Channel 48 (that is Eastern Home Shopping’s Second Channel) and found that the product in question was not a medical equipment as defined in the Pharmaceutical Affairs Law. The name of the product is “fat removing massager” and the advertisement claimed “utilize high-speed microwave technique to break fat tissue …… cells are revitalized and waste, toxin, and some substances inside the body are excreted together through pores upon vibration, attain the results of removing excess fat and reducing the sizes of fat cells” that were without medical theory or clinical testing basis, also were exaggerated and false.
The Department of Health, Executive Yuan stated that the disputed advertisement content for the product in question was exaggerated and false, furthermore, was claimed without medical theory or clinical testing basis. Although the aforementioned supplier Yu-Hsin Company has cited the testing report of Institute of Applied Mechanics, National Taiwan University [Eastern Home Shopping Co. Ltd. (hereinafter referred to as Eastern Home Shopping Company) provided the testing report of Institute of Applied Mechanics, National Taiwan University] and the testing report of Bureau of Standards, Metrology and Inspection, Ministry of Economic Affairs for the product in question as pleas for the charges. However, the investigation found that the last pages of the aforementioned testing reports clearly stated, “The action of ultrasound entering into human’s body is not known after contacting human body.” In addition, the aforementioned reports also clearly pointed out, “This testing report is only for reference purpose, should not be used as proof or commercial advertisement.” Besides, the staffs of Yu-Hsin Company have also confessed the aforementioned remarks when presented at this Commission to give explanations. Therefore, to sum up, the disputed “Challenging Venus Ultrasonic Fat Remover Massager” advertisement in question is broadcasted without any medical theory or clinical testing basis. The quality and content of the product were false and misleading representations, in violation of Article 21 (1) of the Fair Trade Law.
Upon the investigation, it was found that in addition to the supplier Yu-Hsin Company, another two companies, Taipei’s Eastern Home Shopping Network Co. Ltd. (hereinafter referred to as Eastern Home Shopping Network) and Eastern Home Shopping Company were also involved in the production of the disputed “Challenging Venus Ultrasonic Fat Remover Massager” advertisement in question. (1) Yu-Hsin Company owns the disputed product “Challenging Venus Ultrasonic Fat Remover Massager”, in accordance with the provision of “Product Consignment Agreement” signed with Eastern Home Shopping Company; Yu-Hsin Company was responsible to supply products and the related advertised materials for Eastern Home Shopping Company to produce television’s advertisement used in marketing. Both parties have agreed to settle account based on the profit that is calculated as the difference between selling price and purchasing cost. Yu-Hsin Company must be considered as the advertiser in question because it sold products with the aforementioned method. (2) Eastern Home Shopping Company has rights to participate and decide contents of the disputed product’s advertisement. Furthermore, the advertisement’s recorded tape showed that only the marketing phrase “Eastern Home Shopping” appeared on the screen of advertisement without disclosing any information related to the supplier. Eastern Home Shopping Company directly issued invoices to consumers as evidences of sales. Also, Eastern Home Shopping Company handled the overall matters of orders, consultations and after-sales services for the product. Furthermore, throughout the entire trading process, regardless of the objectivity of trading partner (Eastern Home Shopping Company is the salesperson for the issued invoices) or the subjectivity of trading confidence from consumers (Eastern Home Shopping Company is the operator of the shopping channel), all were linked to Eastern Home Shopping Company. Moreover, Eastern Home Shopping Company has also stated that the difference between the selling price and cost of good purchased for the disputed product belonged to Eastern Home Shopping Company. Therefore, since Eastern Home Shopping Company has derived “profits” from selling the disputed advertised products, it should assume the obligation of paying attention to the content’s truthfulness of the aforementioned advertisement. Since Eastern Home Shopping Company was responsible for the production of the disputed advertisement and sales of the advertised product, has rights to participate and decide contents of the disputed advertisement and even received a fixed profit from the sales of advertised product, it can be concluded that Eastern Home Shopping Company is the main entity responsible for the false advertisement in question. (3) The disputed advertisement was broadcasted on Lien Wei Company Channel 48; the aforementioned channel is Eastern Home Shopping’s Second Channel. Eastern Home Shopping Company has operated the aforementioned channel and managed its business operations, regardless of purchasing assets and facilities, hiring employees, signing consignment agreements with suppliers, handling invoices issued by suppliers and issuing invoices to consumers. Eastern Home Shopping Network has used the marketing phrase “Eastern Home Shopping” jointly with Eastern Home Shopping Company. The present evidences and facts are insufficient to conclude that Eastern Home Shopping Network is the main entity responsible for the false advertisement in question.
Yu-Hsin Company and Eastern Home Shopping Company have broadcasted “Challenging Venus Ultrasonic Fat Remover Massager” advertisement on the cable television channel, the advertisement claimed that “utilize high-speed microwave technique to break fat tissue …… cells are revitalized and waste, toxin, and some substances inside the body are excreted together through pores upon vibration, attain the results of removing excess fat and reducing the sizes of fat cells”; the claims were without medical theory or clinical testing basis. The content and quality of the product were untrue and misleading representations, and were found in violation of the provision of Article 21 (1) of the Fair Trade Law. After considering the motivation and purpose of the aforementioned enterprises’ unlawful acts, advertising period, business scales, benefits derived on account of the unlawful acts, market position, their cooperativeness during the investigations and the degree of the acts’ harm to market order, this Commission, in accordance with the forepart of Article 41 of the Fair Trade Law, imposed administrative fines of NT$ 200,000 and NT$ 500,000 respectively on Yu-Hsin Company and Eastern Home Shopping Company.

Summarized by Lin, Yu-Ching
Supervised by Shen, Li-Yu

Appendix:

Eastern Home Shopping Co. Ltd.’s Uniform Invoice Number: 84447390
Yu-Hsin Biotechnology Co. Ltd.’s Uniform Invoice Number: 97328810

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