Hsin Min Gas Safety Equipment Co., Ltd. violated the Fair Trade Law for practicing false advertising
Case:
Hsin Min Gas Safety Equipment Co., Ltd. violated the Fair Trade Law for practicing false advertising
Key Words:
false advertising, gas breaker
Reference:
Fair Trade Commission Decision of December 22, 1999 (the 424th Commissioners' Meeting), Disposition (88) Kung Ch'u Tzu No. 157
Industry:
Other Retail (5590)
Relevant Laws:
Articles 21 of the Fair Trade Law
Summary:
1. The Anti-Counterfeiting Committee of the Ministry of Economic Affairs (MOEA) forwarded to the Fair Trade Commission (FTC) a complaint alleging that Hsin Min Gas Safety Equipment Co., Ltd. ("Hsin Min"), by using clippings of newspapers to claim that "in order to carry out the government's ending [household] gas explosions policy, urge gas users to install gas flow breakers", publicized and promoted sales of its products. Hsin Min was also suspected of misleading the public by making an advertisement, "Joining Hands to Crack Down on Counterfeiting", in the name of the MOEA Anti-Counterfeiting Committee.
2. After investigations, the FTC concluded that the advertisement at issue misled general public to believe that Hsin Min's sales actions were connected with the government, and thus violated Article 21(1) of the Fair Trade Law. Accidents involving gas explosion were frequently and posed a threat to the life and property of the public. Relevant government agencies took this matter very seriously, and therefore reportage of related statements or countermeasures by government officials often appeared in the newspapers. However, an uncontested fact was that even to date the government had not passed any legislation compelling gas users to install gas safety switches. Hsin Min did not use the wording "installation mandated by the government", but, by means of clippings of newspapers quoting government statements, merely pointed to the directions of government's future policy in preventing gas accidents. The advertisement did not misrepresent such government policy. However, at the head of the clippings of newspapers, Hsin Min included the caption:
in order to carry out the government's ending [household] gas explosions policy, urge gas users to install gas flow breakers....and notifying them to carry out the installation. Now, urging all [households] to install [breakers] in line with government public safety policy....
In a corner of the advertisement, Hsin Min also included the following words: "Joining Hands to Crack Down on Counterfeiting," and attributed them without authorization from the MOEA Anti-Counterfeiting Committee. Scrutinizing the entire text of the advertisement it was obvious that Hsin Min intended to induce the public to install gas breakers by creating the impression that it was cooperating with the government in official capacity. Hsin Min exploited the public's trust on government agencies and induced the public to trade with it by misleading them to believe that it was associated with government agencies. Its acts were thus "false and misleading representations" provided in Article 21(1) of the Fair Trade Law.
Summarized by Tai Pei-yi
Supervised by Chu Wei-ch'ing
Appendix:
Hsin Min Gas Safety Equipment Co., Ltd.'s Uniform Invoice Number: 89461173