Complaint against the Jack Wang Motor Co. Ltd. alleging false advertising in violation of the Fair Trade Law

Chinese Taipei


Case:

Complaint against the Jack Wang Motor Co. Ltd. alleging false advertising in violation of the Fair Trade Law

Key Words:

lowest price, combined expression, car accessories

Reference:

Fair Trade Commission Decision of June 15, 2000 (the 449th Commissioners' Meeting); Disposition (89) Kung Chu Tzu No. 102

Industry:

International Trade Industry (5600)

Relevant Laws:

Article 21 and the forepart of Article 41 of the Fair Trade Law

Summary:

  1. This case originated from a person who complained against Jack Wang Motor Co. Ltd. (Jack Wang Motor) relating to an advertisement for the Hyundai ATOS model at the United Daily on 13 August 1999. The consumer complained that the advertisement clearly stated that "special offer for the ATOS smart automatic transmission model, price starting from as low as NT$ 328,000". When the consumer, allured by the advertisement, discussed purchase with a sales representative, he was however told that the above price was only for the manual transmission model and the price for the automatic transmission model was in fact NT$ 368,000. Consequently, the consumer complained that the advertisement was obviously deceptive.

  2. The Fair Trade Commission (the "Commission") found that the advertisement included the followings: "the ultimate dream, ATOS, the cool, magnificent new generation urban mini-RV, 4-cylinder 12-vavle, smart automatic transmission, consolidated power steering, high-carbon impact-resistant side-panel, resistant to front-end collide at up to 35 mp/hr, with 1084-liter trunk space. It has everything you need: feature and safety, work and leisure. Owning the OTAS is even easier and more economical now, starting from NT$ 328,000 ... " The whole context of the advertisement obviously expressed that the new "ATOS" with 4-cylinder 12-valve engine could be acquired for as low as NT$ 328,000, but the actual selling price was NT$ 368,000. It therefore constituted as a false advertising. The Jack Wang Motor defended by saying that the words "smart automatic transmission" applied at the advertisement were a creative term for the same type of car with the character of automatic transmission. The Jack Wang Motor also argued that when an advertisement stated the given price of "XXXX dollars" for a particular model most consumers understood that it usually referred to the manual transmission model with basic accessories. Thirdly, the Jack Wang Motor pointed to that a footnote to the advertisement located under a car picture had stated that "actual accessories may vary." However, given that the advertisement combined the accessories of the "ATOS" model and the lowest price together, the whole context misled consumers into believing that "the ATOS model" with smart automatic transmission was sold for NT$ 328,000. While the advertisement indeed included a footnote underneath the picture stating that "actual accessories may vary," the footnote was in much smaller print and at an inconspicuous place so that it did not affect the overall representation of the advertisement. Therefore, it can be found that the respondent included false and misleading representation on the price of the product and violated Article 21 (1) of the Fair Trade Law.

  3. For the reasons, the Commission found that the Jack Wang Motor published false and misleading representation at its advertisement for the ATOS model in violation of Article 21 (1) of the Fair Trade Law. After considering the degree of injury caused by this illegal act, the scale of the Jack Wang Motor, the circumstances of its violation and its attitude after the violation etc., the Commission, according to the fore part of Article 41 of the Fair Trade Law, ordered the Company to cease its misleading representation and imposed it to a fine of NT$ 150,000.

Appendix:
The Jack Wang Motor Company Ltd.'s Uniform Invoice Number: 11090751


Summarized by Li, Wen-Hsiu
Supervised by Chu, Wei-Ching


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