A complaint is filed against Pingtung Fu An Drugstore for false advertisement

Chinese Taipei

Case:

Key Words:

drugstore, quantity, content, false advertisement

Reference:

Fair Trade Commission Decision of March 24, 2005 (the 698th Commissioners' Meeting); Disposition (94) Kung Ch'u Tzu No. 094033

Industry:

Retail Sale of Drugs, Medical Goods (4651)

Relevant Laws:

Article 21 of the Fair Trade Law

Summary:

The Fair Trade Commission received a complaint letter against Fu An Drugstore at Chiuju Hsian, Pingtung from the general public, stating that the banner hang at the entrance of the drugstore clearly indicates “a carton of milk powder is only $199” (the Fair Trade Commission’s on the spot investigation found that the banner has indicated “milk powder whole carton * $199”), the flier also indicates “don’t forget your rights, milk powder whole carton $199” (it is found that the enclosed flier has indicated “milk powder whole carton * $199”). But, actually the customer has to buy $1,500 nutriment and $450 market value children milk powder; then, he or she can buy one can of milk powder, not the whole carton, at $199 from the drugstore. In addition, the complainant stated that “the mother’s identification card as a basis of birth” and “double price difference will be refunded if the purchase is found to be more expensive” which are published in the fliers at issue may have deceived or misled consumers.
Upon the investigation, the Commission found:
1. The signboard of Fu An Drugstore at Chiuju Hsian, Pingtung read as “Fu An Medicine and Cosmetic”. On the day of our visit, a red banner, written with “milk powder whole carton * $199”, was hang at the entrance of the store. In response to our inquiries, the store clerk of the aforementioned store indicated that the sign “*” on the aforementioned red banner carried the meaning of multiplication. Thus, the whole carton of milk powder is packed with 12 cans and each can of milk powder is multiplied by $199, a customer, in order to be eligible to enjoy this premium, also must take part in activity of the aforementioned store. The aforesaid activity refers to a customer has to buy a can of product from the series of “Pu Yu Erh Shan Pu” (the price of every product in this series is $1800), only then, by doing so, he/she may purchase the product in the specific milk powder area as published in the aforementioned advertisement.
2. A statement from Fu An Drugstore: More than 2,000 filers at issue have been sent out during a period of only one and half month. The store has also paid to make red banner hang at the entrance of the store. For the so-called “milk powder whole carton ‘*’ $199”, the “*” is a sign on computer keyboard, in terms of arithmetic operation, it is equivalent to the sign of “x” in mathematical operation (that is the symbol for multiplication), both signs have the same meanings. The message conveyed by the aforementioned advertisement is such: For customer who buys a whole carton of milk powder, the price for each can of milk powder is $199 (that is 12*199), not the whole carton is sold for $199. The customer actually can find milk powder that is sold for $199 per can (KLIM Yin Yang Milk Powder) at the “specific milk powder area – adults healthcare” as stated in the filer at issue. In addition, the “special milk powder area” in the filer at issue also includes “Gain Smart Choice with High Q $599” and “Enfakid A+ $590”, which the price of each can of milk powder is above $199. It is clear that the price of milk powder in this category is unlikely to be $199 per carton. Therefore, the content published in the flier has clearly told consumers that not all brands of milk powder are sold for $199 per carton.
3. Grounds of Disposition:
  1. From the descriptions of the aforementioned flier at issue and red banner, the investigation has ascertained that there is a “*” sign between “milk powder whole carton” and “$199” in the aforementioned flier, and there is also a “*” between the words and numeric in the red banner at issue as a separation. Hence, it is different from the manner of representation as claimed by the complainant, that is “milk powder whole carton $199”. As to that the accused has claimed that the sign at issue is the sign of “x (that is multiplication sign)” in arithmetic operation, hence the advertisement at issue has conveyed the following message: For customer who buys a whole carton of milk powder, the price for each can of milk powder is $199 (that is 12*199). This explanation for the aforementioned sign is considered as consistent with the general knowledge. With respect to milk powder in the special milk powder area, the selling price of each type of milk powder is clearly indicated; furthermore, the unit price of each can of milk powder is more than $199. Hence, the complainant has interpreted the words in the advertisement at issue, as the “whole carton” of milk powder is $199, such interpretation also seems to be unduly harsh on the aforementioned drugstore, and very difficult to conclude that it is correspond with the overall impression of the advertisement at issue. Therefore, the claim of the accused in this case that the words of “milk powder whole carton * $199” written on the flier at issue and “milk powder whole carton * $199” written on the red banner refer to the case that a customer who buys a whole carton of milk powder, the price for each can of milk powder is $199 (that is 12*199), not the whole carton is sold for $199 is not without basis.
  2. Although as mentioned above, the interpretation of words for the advertisement at issue by the accused is not groundless, but since its advertisement has indicated that a customer can buy the milk powder at $199 per can when he or she buys the whole carton of milk powder, furthermore, there is neither trading condition nor restriction supplemented in the advertisement, however, the accused, after the emergence of the issue, indicated that the “milk powder whole carton * $199” stated in the advertisement at issue is only restricted to the item of “KLIM Yin Yang Milk Powder” and not applicable to other products in special milk powder area. The investigation found that the advertised adult healthcare milk powder series at issue and the advertised words at issue are far apart, and “KLIM Yin Yang Milk Powder” is listed at the bottom, the accused stated that the aforementioned words of “milk powder whole carton * $199” only refers to “KLIM Yin Yang Milk Powder”, such interpretation does not conform to the overall impression of the advertisement at issue, it is hard not to conclude that this is a forced supposition. Even as described by the accused that the aforementioned promotion is only for “KLIM Yin Yang Milk Powder” but the flier at issue has clearly printed the unit price of “KLIM Yin Yang Milk Powder” is “$199”, why is it that the unit price of “whole carton” purchase as greatly promoted by the advertisement and red banner at issue is totally the same as one can purchase? This is clearly in contradiction with the aforementioned claim of the accused that each can of milk powder is $199 only in the case that a customer buys “whole carton” and also not conform to the normal condition of a regular commercial promotion. Therefore, the statements related to “KLIM Yin Yang Milk Powder” in the advertisement at issue are words to avoid responsibility after emergence of the issue and thus unsustainable. Also, the Fair Trade Commission’s on the spot investigation found that the store clerk of the accused has clearly indicated that “milk powder whole carton * $199” on the red banner is in fact the promotion of “milk powder whole carton * $199” in the flier at issue. But, the consumer has to buy a bottle of product, priced more than $1000 per bottle, from the series of “Pu Yu Erh Shan Pu” before he/she may purchase product in the specific milk powder area at $199, a price indicated in the flier at issue. The aforementioned investigation results are similar to the testimony of the complainant in this case. It is thus evident that the accused has not carried out the promotion of buying a can of milk powder at $199 only if “whole carton” of milk powder is bought. The low price of “milk powder whole carton” and “$199” is a trick used to attract consumers to visit the store and, then, later telling them the promotion of bundle sales with high-priced products.
  3. In conclusion, the accused actually has not put the “whole carton” purchase requirement as a presupposition of eligible to enjoy the premium of buying milk powder at $199 per can, such act is sufficient to mislead the general and relevant public into making erroneous decision, and thus has violated the provision of Article 21 (1) of the Fair Trade Law. An administrative fine of NTD 50,000 is imposed and the Drugstore is ordered to cease the representation at issue.

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

Appendix:

Fu An Drugstore’s Uniform Invoice Number: 13604762

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