Mr. Ch'en Liang-cheng violated Fair Trade Law Article 24 with deceptive acts that influenced the trading order

Chinese Taipei

Case:

Mr. Ch'en Liang-cheng violated Fair Trade Law Article 24 with deceptive acts that influenced the trading order.

Key Words:

Che Yuan, photography, contest

Reference:

Fair Trade Commission Decision of August 11, 1999 (the 406th Commissioners' Meeting); Disposition (88) Kung Ch'u Tzu No. 098

Industry:

Hotels (8802)

Relevant Laws:

Articles 24 of the Fair Trade Law

Summary:

1. Mr. Ch'en held "The First Annual National Che-yuan Photography Contest" and attracted a target group of consumers with prizes and lodging discounts. After the consumers made transactions at his hotel, Mr. Ch'en cancelled the contest and withdrew the original prizes in violation of the Fair Trade Law ("the Law").
   
   

2. The Fair Trade Commission (FTC) found that Mr. Ch'en rented Che Yuan Ming Liu Hall from Che Yuan Co,. Ltd. to hold the contest at issue. The act of renting the hall and running it as a hotel meets the definition of what Subparagraph 4, Article 2 of the Law calls "any other person or organization that engages in trade through the provision of goods or services" and is subject to the Law.

3. Although the contest's brochure did not require contestants to stay at the hall as a condition to enter the contest, the FTC found that the prizes and the lodging discounts Mr. Ch'en offered not only motivated consumers to patronize the hotel, but also actually persuaded some customers to travel to and patronize the hotel. The prizes included gold, silver, bronze, finalist, outstanding work, and entrant prizes; prize values ranged from NT$700 to NT$100,000.

4. The FTC also found that Mr. Ch'en cancelled the contest on grounds that "the number of entrants was too low" without counting the number of participants and notifying the contestants. Mr. Ch'en also returned the contestants' works with apologies and two beverage coupons worth less than the prizes listed in the contest brochure. The FTC confirmed these facts, to which Mr. Ch'en also admitted. Mr. Ch'en led a specific group of consumers to transact business with him by deceiving and misleading them. Apart from the unfairness of these acts to his lawful competitors and his violation of business ethics and the public interest, Mr. Ch'en's acts were deceptive and affected the trading order.

In summary, Mr. Chen's acts in this case violated Article 24 of the Law. Although Mr. Ch'en began to prepare for the contest in question before partial amendments to the Law took force on 5 February 1999, he cancelled the photography contest and committed the unlawful acts that lured consumers to his hotel after the amended Law took force. The case should, therefore, be processed in accordance with the amended Law. Having considered factors including the value of the prizes that should have been awarded, the FTC disposed in accordance with the fore part of Article 41 and fined Mr. Ch'en NT$300,000.

Summarized by Cheng Chia-lin
Supervised by Lin You-ch'ing

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